The French exit tax (Article 167 bis of the General Tax Code) applies to individuals who transfer their tax residence outside of France while holding significant unrealised capital gains on company securities or subscription rights. It triggers an immediate tax assessment on the latent gain at the date of departure, though payment can be deferred (sursis de paiement) as long as the taxpayer resides in an EU/EEA state or a state with a tax information exchange treaty with France. The tax falls due if the securities are actually disposed of within five years of departure.

The exit tax applies to taxpayers who have been French tax residents for at least six of the ten years preceding departure and hold securities representing more than 50% of a company's earnings, or whose total unrealised gain exceeds €800,000, or whose securities value exceeds €2.57 million. The gain is taxed at the 30% flat tax (PFU) rate. French entrepreneurs relocating to Switzerland — a major Franco-Swiss corridor — are systematically exposed to exit tax analysis.

For Franco-Swiss relocations, the tax deferral mechanism is available since France and Switzerland have a tax information exchange agreement. The taxpayer files a specific declaration at departure, provides guarantees if the gain exceeds €2.57 million, and monitors the five-year window. If the securities are held for five years after departure without disposal, the exit tax is cancelled. Understanding the exit tax is therefore critical for any French entrepreneur considering Swiss relocation for tax optimization.

At Hectelion, we value securities subject to exit tax and advise on the structuring of Franco-Swiss relocations in our valuation and financial structuring mandates.