Germany Exit Tax (Wegzugsteuer) When Moving to Cyprus: 2026 Guide

Germany imposes an exit tax (Wegzugsteuer) on individuals who leave the country and hold qualifying shareholdings. For German entrepreneurs, startup founders, and crypto investors considering a move to Cyprus, understanding this tax is essential before making any decisions. The good news: moving to an EU country like Cyprus may allow you to defer the exit tax indefinitely.

What is Germany's Exit Tax (Wegzugsteuer)?

Under §6 AStG (Außensteuergesetz), Germany taxes the unrealised capital gains on qualifying shareholdings when a German tax resident emigrates. Key points:

• Applies to: shareholdings ≥1% in any corporation (German or foreign)
• Tax base: fair market value of shares at date of departure minus acquisition cost
• Rate: German income tax rate on capital income (~26.375% including solidarity surcharge)
• Trigger: ceasing to be a German tax resident
• Does NOT apply to: shareholdings <1%, real estate, crypto (separate rules apply)

Does the Exit Tax Apply When Moving to Cyprus?

Cyprus is an EU member state, which is crucial. Under EU law and the revised §6 AStG (post-2022 reform):

• Moving within the EU/EEA: exit tax is assessed but payment is deferred until actual sale
• This means: no cash payment at the moment of leaving Germany
• Deferral: automatic, no application needed
• Interest: no interest accrues during the deferral period
• Reporting: you must file Form "Erklärung über den Wegzug" with your German tax authority
• The deferred tax becomes due when you actually sell the shares (regardless of where you live)

Crypto and Germany Exit Tax

Crypto assets are NOT subject to the §6 AStG exit tax because they are not "shares in a corporation." However:

• In Germany: crypto held >1 year is 0% tax (Haltefrist)
• In Cyprus: crypto gains are taxed at 8% flat rate from 2026
• Timing matters: if your German crypto has been held <1 year and you move to Cyprus before selling, you avoid the 26.375% German tax and pay 8% in Cyprus instead
• If held >1 year: better to sell in Germany (0%) before or after moving — no exit tax applies to crypto

Practical Steps — Checklist for Germans Moving to Cyprus

1. Calculate your qualifying shareholdings (≥1% threshold)
2. Get a formal valuation of shares at departure date
3. File Wegzug notification with German Finanzamt (Formular nach §6 AStG)
4. Establish Cyprus tax residency (183 days or 60-day rule)
5. Obtain Cyprus Tax Residency Certificate (Form TD98)
6. Notify your German bank/broker of change of tax residency (submit W-8BEN or German equivalent)
7. Track deferral: deferred exit tax becomes due when shares are sold

Exit Tax vs. No Exit Tax — What Germany Taxes, What Cyprus Taxes