This English page mirrors the French reference page for international clients. It is written for decision-makers who need a clear first reading before a tailored French tax analysis.
Article 167 bis CGI
The central provision of the French Tax Code governing exit tax on certain unrealised gains and deferred gains when a taxpayer transfers tax residence outside France.
Latent capital gain
The unrealised gain existing at the date of departure, generally computed as market value minus tax acquisition price.
Payment deferral
The mechanism by which assessed exit tax is not immediately collected, subject to statutory conditions and sometimes guarantees.
Relief
The later cancellation or reduction of exit tax when the taxpayer meets the holding-period or other statutory conditions.
Tax residence
The legal qualification determining whether and when the taxpayer has transferred residence outside France. It requires both domestic and treaty analysis when a convention applies.
How the main exit-tax concepts fit together
The terms in this glossary describe different stages of one file. Scope asks whether the taxpayer and holdings fall within Article 167 bis. Assessment determines the latent gain or other amount included at the residence-transfer date. Payment deferral postpones collection under stated conditions; it does not erase the assessment. Relief or cancellation may later extinguish all or part of the charge if the statutory conditions are met. Keeping these stages separate avoids many common misunderstandings.
Core working definitions
- Latent capital gain
- The difference, determined under the applicable rules, between the transfer-date value of an in-scope holding and its tax basis. No sale is required for that valuation exercise.
- Tax basis
- The acquisition value used for tax purposes, adjusted where the law requires. Purchase, gift, inheritance, option exercise and prior reorganisations can produce different records.
- Earn-out receivable
- A right to additional sale proceeds dependent on a future event. It is not the same as an unsold shareholding and needs separate treatment.
- Gain under deferral
- A gain already realised for tax purposes whose taxation has been postponed under another provision. It must not be confused with an unrealised gain.
- Automatic payment deferral
- A postponement available without an express option when the statutory territorial and cooperation conditions are met. “Automatic” does not mean that no return or monitoring can ever be required.
- Optional payment deferral
- A postponement requested under the prescribed procedure, potentially involving a representative and security.
- Relief
- The later extinction or reduction of an assessed amount under specified events or after a statutory period; it is different from a cash refund in every case.
- Guarantee
- Security accepted to protect collection where required. Its amount, form, maintenance and release need to be documented.
Residence and treaty vocabulary
French domestic residence is tested under Article 4 B. Treaty residence resolves qualifying dual-residence situations under the wording of the applicable convention. Administrative residence, such as a visa or residence permit, is evidence of lawful presence but is not automatically tax residence. Transfer date is the factually supported date on which the relevant residence changes, not simply the date printed on a chosen document.
Definitions can change with legislation and context. Consult the current Article 167 bis CGI and BOFiP guidance before using a glossary term in a return or legal opinion.
Terms that should not be used interchangeably
Residence, domicile and habitual abode can have different meanings under domestic law, a treaty and ordinary language. Assessment, payment and collection describe different procedural stages. Security is not the same as the tax itself, and release of security is not always the same administrative act as relief. A disposal may include more than a conventional third-party sale, depending on the statutory provision. When translating a French form or opinion, retain the French legal term in brackets on first use so that the English explanation can be traced back to the governing text.