You are a French tax resident holding a portfolio of shareholdings and plan to relocate to another country.
You are a managing partner of a company or group of companies and have to leave France for professional reasons.
Consequences of the transfer of tax residence outside France
Taxpayers resident for tax purposes in France for at least 6 of the 10 years preceding the transfer of their tax residence outside France will have unrealised gains on securities they hold subject to income tax and social security contributions. This mechanism referred to as “exit tax” is triggered when the company shares or securities represent at least 50% of the company profits or if their overall value exceeds €800,000.
Unrealised gains are taxable by a single lump-sum deduction of 12.8% or using the income tax progressive scale. Social security contributions are also due at the rate of 17.2%.
A payment extension is automatically given if the taxpayer moves to an EU member country or to a country that has concluded a convention on assistance with France with the purpose of fighting fraud and tax evasion.
This payment extension is interrupted if the taxpayer:
- Transfers the shares, offers or benefits from a repurchase/exchange of the shares; or
- Donates the shares.
A rebate (or a tax refund if tax has been paid) is granted automatically by the tax authority in the following situations:
- Death of the taxpayer
- In the case of transfer of the taxpayer’s tax residence to France
- Under certain conditions if the donation of shares is made for non-tax purposes
- After 2 years have elapsed (5 years if the overall value of the shares exceeds €2.57 million on the date of transfer).
The taxpayer placed under the exit tax regime is required to respect a certain number of reporting obligations.
Altexis offers you support in your relocation plans:
- We can analyse and optimise the consequences of relocation from the point of view of the exit tax regime.
- We can carry out the reporting formalities linked to the application of the exit tax regime.