NEW EXEMPTION RULE FOR FRENCH TAX RESIDENTS
If you left France between March 3, 2022, and December 31, 2023, and requested to benefit from the capital gain tax suspension, you may now be exempt from the social contribution on the latent gain you had at the time of your departure. This exemption is made possible by the financial law 2024. However, it is crucial for concerned taxpayers to file a specific tax request in due course, as the timing to lodge this claim is debatable.
UNDERSTANDING EXIT TAX
Exit tax is a measure designed to prevent tax avoidance by individuals who move their residence out of a country while holding significant unrealized capital gains. This concept exists in various European countries with different scopes, including Portugal, Spain, Germany, and the Netherlands.
TAXATION FOR FRENCH TAX RESIDENTS LEAVING FRANCE
As a reminder, since 2011, French tax residents leaving France can be subject to taxation on the "latent" (unrealized) movable capital gain. This applies to taxpayers who have been resident for at least 6 years out of the previous 10. However, this taxation can be suspended if a specific procedure is followed at the time of departure and depending on the country of arrival. The latent capital gain can be suspended for 2 to 5 years for those departing this year.
STRATEGIC PLANNING CONSIDERATIONS
It is essential for individuals planning to move to or from France to carefully consider and plan for these regimes, both in the departing country and in France. Stay informed, and make informed decisions!
For specific advice, it is recommended to consult an expert in international taxation.
