Exit tax in Europe: where you pay when you move and how to plan for it

In brief

• An individual exit tax applies in France, Germany, Spain and the Netherlands. Italy has put one into its 2027 draft budget.
• It does not hit everyone who leaves, only holders of large securities portfolios or company stakes who have lived in the country for many years.
• The gain accumulated during residence is taxed. There are no sale proceeds but there is a tax bill, so the main problem is liquidity.
• Moving within the EU and EEA brings deferral almost everywhere. Moving to the UAE, Asia or the US often brings no deferral or stricter terms.
• Exit tax should be calculated when you choose a country to live in, not in the year you leave.

What exit tax is

Capital gains tax is normally paid when you sell an asset. Buy shares at 100, sell at 300, pay tax on 200. Exit tax changes the moment. If you stop being a tax resident of a country, it treats you as having sold your assets at market value on the day you leave, taxing the gain built up during your years there.

The state's logic is clear. While you lived there, your company grew on its market and you used its infrastructure and legal system. If you leave and sell a year later in a country without capital gains tax, the first country gets nothing. Exit tax closes that gap.

For the individual the problem is different: the tax arises without cash. You have not sold the business or received proceeds, yet you owe tax on its growth. If most of your wealth sits in a private company, finding the money quickly can be hard. So almost all countries offer deferral, especially for moves within the EU, where EU law restricts such taxes.

What this means for you. If you own a business or a large portfolio and are choosing a country for 10 years or more, calculate not only the tax on arrival but the cost of leaving. In some countries it can reach hundreds of thousands of euros.

Where exit tax already exists: a comparison

Each country has its own rules, but they share a pattern: a minimum residence period, a minimum asset size and deferral for moves within the EU. The main ones compared:

The table shows the general rule. The tax targets people who lived in a country for a long time and built up large holdings. A new resident with three or four years usually falls outside it, as does someone with a small portfolio. But an entrepreneur who moved with a stake in a growing company and stayed more than five to seven years is a typical payer.

France: EUR 800,000 and six years

The French exit tax is set by Article 167 bis of the General Tax Code. It applies to those who were French tax residents for at least 6 of the last 10 years and hold shares worth EUR 800,000 or more in total, or at least 50% of a company's profits. The gain on those securities at the date of departure is taxed.

The rate is the standard one for capital gains: 12.8% income tax plus 17.2% social charges, 30% in total. On moving to an EU or EEA country, or one with a tax recovery assistance agreement with France, the tax is deferred automatically. If the securities are not sold, the deferred tax is cancelled 2 years after departure, or 5 years if they are worth over EUR 2.57m. For moves elsewhere, deferral must be requested and secured.

Germany: a 1% stake and seven-year instalments

In Germany exit tax is governed by section 6 of the Foreign Tax Act. Since 2022 it applies to those who had unlimited tax liability in Germany for at least 7 of the last 12 years and hold a stake of 1% or more in a company. There is no value threshold: the stake itself is what counts, so owners of small but growing companies are caught too.

The gain on the stake is taxed as if sold: as a rule 60% of the gain is added to income and taxed at progressive rates. The automatic deferral that used to apply to moves within the EU has been abolished. Instead the tax can be paid in equal instalments over 7 years on request, and the tax office may demand security. Returning to Germany within 7 years can cancel the tax.

Spain: EUR 4m and ten years

Spain's exit tax has applied since 2015 under Article 95 bis of the personal income tax law. The threshold is higher than its neighbours': a person must have been a Spanish tax resident for at least 10 of the last 15 years and hold shares and fund units worth over EUR 4m, or over EUR 1m with a stake above 25% in a company.

On moving to an EU or EEA country that exchanges tax information with Spain, the tax is charged only if the securities are sold within 10 years or the person ceases to be an EU resident. On a temporary work posting to a country that is not a tax haven, payment can be deferred and cancelled on return. For those who came to Spain under the regime for foreign workers, the years under that regime also count.

Netherlands: substantial interest and ten years

The Netherlands uses a "protective" assessment. If the holder of a substantial interest - 5% or more of a company - ceases to be resident, the tax office assesses tax on the gain but does not demand it at once. It becomes payable if the stake is sold or the company pays large dividends within 10 years of departure. If nothing happens, the assessment lapses.

This approach is gentler than the French or German one: no cash is needed immediately. But it keeps the owner on the hook for 10 years and requires reporting on what happens to the stake.

Italy: the 2027 draft

Italy has so far not taxed private individuals on departure. In October 2026 the government put Article 17 into the 2027 draft budget: 26% on unrealised gains for those who were tax resident 6 of the last 10 years and hold assets of EUR 800,000 or more. We covered the draft in our report on the Italian exit tax. The Italian twist is the overlap with the flat tax for new residents: the draft does not say how the exit tax would apply to people who paid the flat amount for years.

A worked example

Take a founder who moved with a stake in his own company. When he arrived the stake was worth EUR 100,000; eight years later it is valued at EUR 3,000,000. He decides to move to a country without income tax. The gain is EUR 2,900,000.

The figures are illustrative: the exact amount depends on the type of company, the tax cost of the stake, reliefs and the tax treaty. But the order of magnitude shows the point: for the owner of a growing business, exit tax can eat a large share of what he expected to save in his new country. And he may have to pay it from other money, because the stake has not been sold.

Who is affected in practice

Three typical payer profiles emerge from these rules:

• A founder who moved with a stake in a start-up when it was worth almost nothing. Over years of residence the stake grew many times, and almost all its value is gain.
• An investor with a large portfolio who has lived in the country for many years and plans to move for retirement or for the children.
• An entrepreneur's family that lived in Europe and decided to move to the UAE or Asia for tax reasons. That is the move least likely to bring deferral.

And who is not affected: those who lived in the country for less than the required period; those whose assets are below the thresholds; those whose wealth is mainly in real estate located in that country, since the country keeps the right to tax it after departure and exit tax usually does not cover it; and those moving to an EU country where deferral works.

Other countries and what may come

The list of countries with an exit tax is not closed. Norway has tightened such rules for shareholders in recent years, and debates on taxing departing wealthy residents are under way elsewhere. The reason is shared: states compete for affluent residents with entry incentives while not wanting to lose tax on capital that grew on their territory.

For anyone choosing a country now, this means one thing: a regime that looks attractive on arrival may acquire an exit tax five to seven years later, as is happening in Italy. So when comparing countries, assess not only today's rules but the direction in which the country is changing them.

In practice we build a ten-year scenario for each client: arrival, annual taxes, a possible business sale and departure, in each candidate country. Exit tax often turns out to be the very line that changes the final ranking of countries.

How to factor exit tax into choosing a country

The main advice: think about leaving when you arrive. When choosing a country to live in, answer four questions:

Say you are an entrepreneur weighing Spain, Italy and Malta. Spain taxes departure only after 10 years and on holdings over EUR 4m. Italy, under the draft, after 6 years and from EUR 800,000. Malta has no individual exit tax. If you plan to live in a country for 7-8 years and then leave, the difference between these options can run to hundreds of thousands of euros. I compared regimes for new residents in detail in my review of 2026 tax regimes.

There are lawful ways to reduce the tax: selling some assets before the residence threshold is reached; structuring ownership through a holding before moving rather than after; planning a business sale around the departure date. Each step needs a calculation under the specific law, so do not improvise.

Where people move and what that changes

The destination decides almost everything. Within the EU, freedom of establishment and EU Court of Justice case law restrict exit taxes: as early as 2004 the Court found France's former exit tax to be a restriction on that freedom. So a move to another EU country almost always brings deferral or instalments.

A move to the UAE or other countries without income tax looks different. There is no deferral, or only against security, and the tax often has to be paid at once. That does not make moving to the UAE unprofitable, but the calculation must be complete: tax-free years in Dubai against a one-off tax on leaving Europe. Common mistakes in that calculation are covered in our article on UAE tax myths, and ownership structures in our piece on UAE holding companies.

Britain is a separate case. It has no exit tax, but since 2025, after 10 years of residence, its inheritance tax reaches a person's worldwide assets. For long-term residents this is a similar "tax on staying long". More in our report on the UK settlement reform and our article on inheritance tax.

Expensive mistakes

1. Assuming departure is the day you leave. Tax residence ends under the law and the tax treaty, not on your moving date. You can leave in October and remain resident for the whole year.
2. Selling the business after leaving without a calculation. If exit tax has already been assessed, a sale can make it immediately payable, and the new country may tax the same gain again.
3. Forgetting to claim deferral. In many countries deferral must be claimed in the return for the year of departure. Missing the deadline turns deferral into an immediate payment.
4. Not checking the new country. If the destination does not recognise the tax paid on exit, the same gain is taxed twice.

Conclusion

Exit tax affects a narrow group of people, but for them the cost of a mistake is high. If you have a business or a large portfolio and plan to live in a country for more than five or six years, include the cost of leaving in your choice from the start. Compare countries for tax residence in our section on tax residence and our review of the best countries for tax residence. How residence is determined is covered in our articles on the 183-day rule and Cyprus tax residence. For Portugal, see our analysis of D7 visa taxes. We will run the numbers for your situation in an online consultation.

How this article was prepared

This article was prepared on 9 November 2026. Sources: Article 167 bis of the French General Tax Code; section 6 of the German Foreign Tax Act; Article 95 bis of Spanish Law 35/2006 on personal income tax; Dutch legislation on substantial interests; Article 17 of Italy's 2027 draft Budget Bill; EU Court of Justice judgment in Case C-9/02 of 11 March 2004. Rules are stated in general terms; a calculation requires checking the law in force on the date of departure.