Leaving France: the exit tax, the trailing net, and the Switzerland treaty trap

Why this corridor needs a guide. France crossed into net millionaire outflow in the most recent Henley data — founders and rentiers heading to Switzerland, Italy, Portugal, the UAE and Belgium. The French system anticipated them decades ago: departure does not simply end French taxation, it changes its shape. Three mechanisms follow you out — the exit tax on unrealised gains, the IFI on French real estate, and article 750 ter's reach over your heirs — and one destination-specific clause (France–Switzerland) can delete your treaty protection entirely. Every one of these is manageable with sequencing; none is manageable retroactively.

Who it's for. French tax residents (nationals or not) preparing to leave, and their accountants on both ends. Figures for income year 2025 / IFI 2026 — verify before filing.

Part 2 — The exit tax (art. 167 bis CGI)

Who is in scope. You were French tax resident at least 6 of the 10 years before departure, and on the departure date you hold:

• shares/fund units worth more than €800,000 in aggregate, or
• a stake of at least 50% in any company.

What it does. Your unrealised gains (plus certain deferred gains and earn-outs) are deemed realised on departure — taxed at the 30% flat tax (12.8% income tax + 17.2% social levies), or under the progressive scale by election. The tax is computed immediately, but:

Payment is suspended (sursis de paiement) automatically if you move to an EU/EEA state or any state with mutual assistance agreements (which now covers most destinations, including the UAE and Switzerland). Moves to non-cooperative jurisdictions require a guarantee and an appointed fiscal representative.

The gains are erased — the exit tax cancelled — if you still hold the shares:

• after 2 years, where the total value in scope is under €2.57m;
• after 5 years, where it exceeds €2.57m;
• or on death, or on return to France with the shares still held.

What triggers actual payment: selling, gifting (with exceptions), or company liquidation during the retention window — France then collects on the departure-date gain, with a credit mechanism for tax the destination levies on the same gain.

Compliance is not optional: form 2074-ETD with the departure-year return, then annual follow-up (2074-ETS) during the deferral. Missing the paperwork can forfeit the suspension — turning a theoretical tax into a payable one.

Planning reads:

• Sell after erasure, not before. A founder moving to Italy or the UAE who holds through the 2/5-year window sells with the French exit charge extinguished; the same sale in year one crystallises it.
• The pacte Dutreil and gifts interact with exit tax mechanics badly — take advice before gifting shares from abroad; a gift can be a triggering event unless the donee commitment conditions are met.
• Departure before a liquidity event is the whole game; departure during one (signed LOI, agreed heads) invites an abuse challenge.

Part 4 — Destinations, and the Switzerland treaty trap

Switzerland — the forfait clause almost nobody reads. Switzerland's lump-sum taxation (imposition d'après la dépense) is the classic landing spot for French wealth. But the France–Switzerland treaty denies treaty-resident status to persons taxed on a lump-sum basis computed on the rental value / expense basis, unless the base meets conditions (the "forfait majoré" — taxed on at least all French-source income and a base uplifted ~30%). An ordinary forfait resident is, in French eyes, not a treaty resident at all: France can keep taxing French-source income without treaty limits and, worse, dual-residence disputes lose their tie-breaker. Anyone choosing between ordinary Swiss taxation and the forfait must price this clause first — many French arrivals deliberately take ordinary taxation in a low-tax canton instead. (Geneva/Vaud frontier arrangements and the 2023 telework addendum are a separate, employment-level topic.)

Italy — the €200k flat tax explicitly covers French-source-except-Italian income and sits inside a normal treaty; France has litigated aggressively against paper moves to Italy, so substance (home, days, family) decides.

Portugal — NHR is closed; the successor (IFICI) is narrow, professional-activity-based. The rentier door has shut; pensioners and passive movers should model ordinary Portuguese rates before assuming a Lisbon discount.

UAE — France actually has a treaty with the UAE (rare): it keeps French taxing rights on French-source items but provides the tie-breaker and — usefully — no French tax on UAE employment income properly sourced there. The exit tax deferral runs fine to the UAE under mutual-assistance rules; the 7.5% social-levy relief on French rents does not apply (non-EU).

Belgium — no wealth tax and no CGT on ordinary private gains keeps Brussels a French-speaking classic; watch the new Belgian solidarity contribution and the foyer-in-France trap for commuters.

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Part 5 — Sequenced checklist

Before departure

1. Break all three art. 4 B anchors on a documented date — family, activity, economic interests; the foyer moves with the family, not with you.
2. Inventory shareholdings against the €800k / 50% thresholds; compute the deemed gain, choose flat tax vs scale, prepare 2074-ETD.
3. Model the retention window (2 vs 5 years by the €2.57m line) against any expected liquidity event; delay signings past the departure where abuse optics demand.
4. Decide the French home's fate: sell resident (exempt) or price the non-resident regime.
5. Estate audit under 750 ter: map each heir's French-residence clock; consider assurance-vie (its own favourable regime survives non-residence for pre-departure contracts) and pre-departure gifts using the 15-year allowance reset.

Departure year 6. Final resident return + 2074-ETD; register with SIPNR; appoint representative if required. 7. Switch rentals to the non-resident regime (20%/30% minimum + levies; claim the 7.5% rate if EU-affiliated); check the 3% annual tax exposure of any property-holding company. 8. If Switzerland: choose ordinary vs forfait taxation with the treaty clause priced in.

While away 9. File 2074-ETS annually while the exit-tax deferral runs; diarise the 2/5-year erasure date; keep proof of continued holding. 10. Re-run the plan before any return: returning with the shares erases the exit tax, but returning heirs-first re-arms 750 ter.

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The trap list

Trap	Why it bites
Family stays in France "for the school year"	The foyer test keeps you French-resident; the whole plan fails at anchor one.
Selling in year one abroad	Crystallises the exit tax that two more years of holding would have erased.
Skipping form 2074-ETS	The deferral can lapse on paperwork alone — the computed tax becomes collectible.
Swiss forfait taken off the shelf	Treaty-resident status denied under the France–Switzerland clause; France keeps full taxing rights and there is no tie-breaker to save you.
"France has no treaty with the UAE" assumption	It does — and using it properly (TRC, sourcing) is what keeps French withholding honest.
Forgetting the heirs' clock	750 ter taxes a French-resident heir on your worldwide estate; your emigration alone protects nothing.
Keeping the Paris flat casually	IFI above €1.3m continues for non-residents; rental minimum rates + social levies apply; the "empty pied-à-terre" is a recurring tax invoice.
Trust somewhere in the structure	French trust reporting and levies survive departure; unwind or paper it before leaving.

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Sources (primary, verify current figures)

CGI art. 4 B (residence tests); art. 167 bis (exit tax: 6-of-10-years condition, €800k / 50% thresholds, sursis de paiement, 2/5-year erasure at the €2.57m line, forms 2074-ETD/ETS); PFU 30% (12.8% + 17.2%); IFI arts. 964 ss. (€1.3m threshold, non-resident French-property scope); non-resident minimum rates (art. 197 A: 20%/30%) and social levies with the 7.5% EU/EEA/UK rate; art. 750 ter (succession reach, heir 6-of-10-years rule); assurance-vie arts. 990 I / 757 B; France–Switzerland DTA art. 4 (lump-sum residents exclusion); France–UAE DTA; trust regime arts. 1649 AB, 990 J; Dutreil art. 787 B.

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Built for the OpenAccountants migration desk. France doesn't block the door — it meters it: an exit charge that erases itself if you hold, a wealth tax that stays on the stones you keep, and a succession net thrown over the heirs who stay. Sequence those three against a single departure date, price the destination clause (especially the Swiss one), and the corridor is clean — with a named accountant on each end.