Exit tax: what leaving can cost
A salary comparison stops at your pay. If you hold shares or a company, the departure itself may be taxed, on gains you have not sold. For a senior manager with equity, the cost of leaving can exceed several years of the tax you hoped to save. Exit taxes treat shares as if they had been sold on the day you leave, so you can owe tax on a gain you have not received. The four systems below differ in who they reach, at what level and how they can be deferred. France looks at the value of your holdings, Germany at the percentage you hold, Canada at most of what you own, and the United States only at giving up citizenship or long-term residence. Get this figure before comparing countries, since it changes the order of everything that follows.
Your situation
Exit tax on leaving
| Value threshold | €800,000 |
|---|---|
| Residence required | 6 of 10 years |
| Cancelled if still held | 2 years |
Article 167 bis of the French tax code. Deferring payment depends on where you go. This says whether the text reaches you, not how much you would owe: that depends on your gains.
The four systems at a glance
| Country | Who it reaches | Way out |
|---|---|---|
| France | Shares above €800,000, or 50% of a company’s profits, after 6 of 10 years resident | Cancelled if still held after 2 years, or 5 above €2.57 million |
| Germany | Holdings from 1%, after 7 of 12 years resident | 7 yearly instalments; lapses on return within 7 years |
| Canada | Certain property, treated as sold at market value | Form T1161 above $25,000 of property |
| United States | Giving up citizenship or long-term residence: $2 million net worth, or the tax test, or no certification | Form 8854 |
France
After six of the last ten years as a resident, article 167 bis taxes unrealised gains on shares when they exceed €800,000 at the date of departure or represent at least 50% of a company’s profits. If you still hold the shares two years later, the tax is cancelled. That period becomes five years above €2.57 million.
In practice the French tax office makes the deferral automatic by default. A request with guarantees, filed at least 90 days before you leave, is only needed for a non-cooperative state or a non-EU state with no assistance agreement with France on fraud and tax recovery. The tax page does not list the countries, so check your destination before you book anything: we could not confirm a list on an official page we could read.
The paperwork outlasts the move. Form 2074-ETD covers the year of transfer and is filed the year after you leave, then a follow-up form comes each year while the deferral runs, and any later change of country must reach the non-resident tax office within two months. A worked case: €1.1 million of shares, eight years resident, a move to Spain. If the shares are still held after two years, the tax is relieved; a sale in month 14 makes it due.
Germany
Section 6 of the Foreign Tax Act reaches people who were subject to unlimited tax for at least seven of the previous twelve years and hold shares within section 17 of the income tax law, which starts at 1%. On request the tax can be paid in seven equal yearly instalments, generally against security. It lapses if you return within seven years, a period the tax office can extend by up to five.
Leaving is not the only trigger: so is a gift or inheritance to someone outside unlimited German tax, or Germany losing its right to tax a sale of the shares. The first instalment falls due within a month of the assessment, the rest on 31 July each year, free of interest. A bill of €140,000 therefore means seven payments of €20,000.
The balance falls due early if you miss an instalment, sell the shares or take distributions above a quarter of their value, and the same quarter limits the lapse on return. Those events must be reported electronically within a month, and every 31 July you confirm your address and that you still hold the shares.
Canada
When you leave, you are treated as having sold certain property at fair market value, which can create a capital gain with no sale behind it. If everything you owned was worth more than $25,000 when you left, you must file Form T1161.
Plenty escapes the deemed sale: Canadian real estate, the assets of a business run through a Canadian establishment, pensions, RRSPs, RRIFs and TFSAs. So does property you already owned on arrival, if you were resident for 60 months or less in the ten years before leaving. The gain goes on Form T1243. Form T1161 ignores cash, registered plans and personal items under $10,000, and filing it late costs $25 a day, from $100 up to $2,500.
You can defer the tax without interest until you actually sell, using Form T1244 by 30 April of the year after you leave. Security is required when the federal tax deferred exceeds $16,500, or $13,777.50 for former Quebec residents, so speak to the tax agency before that date rather than on it.
United States
The charge is for giving up citizenship or long-term residence, not for moving. You are a covered expatriate if your net worth is $2 million or more, if your average yearly income tax over five years exceeds a set figure ($206,000 for 2025), or if you cannot certify five years of compliance on Form 8854.
A covered expatriate is treated as having sold everything at fair market value the day before expatriating. The gain is then reduced by an exclusion, $890,000 for 2025, and you may elect to defer the tax on property deemed sold. On a gain of $1.2 million, $310,000 would remain taxable under that 2025 figure. Failing to file Form 8854 when required can cost $10,000.
The IRS page cites the legal definition of a long-term resident without giving the number of years, so read section 877(e) of the tax code, or ask an adviser, if you hold a green card.
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Questions
Does an exit tax apply to my salary?
No. These rules target gains on shares and other assets, not pay. Someone leaving France or Germany with a salary and modest savings is usually outside both regimes. Check the rules if you hold company shares, options or a business, since the charge can apply to value you have not yet turned into cash.
Does moving abroad trigger the US expatriation tax?
No. It applies when you give up citizenship or end long-term residence, and only if you meet the net worth test, the income tax test or fail the five-year certification. A citizen who simply moves abroad is outside it, but keeps filing US returns every year and may still owe US tax.
Is the French exit tax final?
Not always. It is cancelled if you still hold the shares two years after leaving, or five years when their total value exceeded €2.57 million at departure, and also if you return first. Selling within that period makes the tax due. Payment can be deferred automatically in some destinations, and elsewhere only on request with guarantees.
Sources
Figures 2026, checked on