France's National Assembly aims to reinstate a stricter exit tax, requiring 15 years of share holding before leaving the country, but its final implementation remains uncertain.
French Assembly votes on exit tax reform
The French National Assembly adopted cross-party amendments on Friday, October 30, 2026, aiming to restore the exit tax as it was originally designed in 2011, prior to its relaxation in 2019. The vote proposes returning to a target holding period of 15 years for securities, compared to the current 2 to 5 years. However, the final version of the 2027 state budget, which is still unknown, will determine the implementation.Exit tax targets unrealized capital gains
The exit tax imposes a tax on individuals holding shares who transfer their fiscal residence abroad. It taxes the unrealized capital gain that would result from the sale of their shares. Under this tax, individuals leaving France pay tax on this unrealized capital gain at the time of departure, even if they do not actually sell their shares.2019 reform shortened holding period
The 2019 finance law reduced the holding period after departure, changing it from 15 to 2 to 5 years depending on the situation. Since this reform, individuals moving their fiscal residence abroad must hold their shares for 2 to 5 years (instead of 15 years as previously required) to avoid the exit tax.Critics call reform a gift to the wealthy
The subject of the exit tax has been described as one requiring "compromises" by the government. Éva Sas (Ecologiste and Social) criticized the 2019 reform, stating it reduced the period to two years, calling it "another gift to the wealthy and, in this case, to fiscal exiles." Amendments aiming to return to the original holding period were proposed by the Socialists, Left Democrats and Republicans, and The Democrats.Budget rapporteur highlights revenue concerns
The general rapporteur of the budget, Philippe Juvin (Right Republican), did not outright oppose the return to the original exit tax mechanism but highlighted the "weak revenues" generated by it. He noted that between 2011 and 2016, when the holding period was 15 years, the tax generated 25 million euros in annual revenue. He warned that this could potentially deter some people from investing in France.Government opens door to compromise
The government did not support the amendment in its current form but did not prevent its passage. The minister of Action and Public Accounts, David Amiel, opened the door to work on "intermediate durations" within the framework of compromises to be built in the coming weeks. At this stage, the amendment was adopted by 31 votes "for," 20 votes "against," and 35 abstentions (details of the vote can be consulted here).
