Direct answer
A French exit tax review should begin before tax residence is transferred, while the departure date, destination, holding structure and valuation evidence can still be organised coherently. The purpose is not merely to complete a form. It is to decide whether article 167 bis of the French Tax Code applies, identify the relevant assets and deferred gains, determine the payment-deferral route and create a reliable post-departure monitoring file.
When should a French exit tax lawyer be involved?
French exit tax should be reviewed before the taxpayer leaves France. The analysis combines French tax residence, share valuation, form 2074-ETD, payment deferral, potential guarantees, follow-up filings and subsequent audit risk.
The useful legal work is to determine whether article 167 bis CGI applies, measure the taxable base, secure the valuation of private company shares, and choose the appropriate pre-departure strategy. Pre-departure transactions should not be treated as mechanical solutions: their economic substance, timing, documentation and anti-abuse risk must be reviewed.
What does article 167 bis actually require?
The statutory regime must be read asset by asset. It can concern latent gains on qualifying securities, receivables arising from an earn-out clause and gains that were already under a French tax deferral when residence was transferred. Those categories do not necessarily follow the same calculation or later-event rules. A threshold analysis for a share portfolio must therefore not be reused automatically for an earn-out receivable or a previously deferred gain.
The taxable event and the payment position are also separate questions. The departure may bring an amount within the exit tax regime while payment is deferred under the statutory conditions. The destination country, the applicable administrative-assistance and recovery framework, and the facts at the transfer date determine whether the file follows the automatic or optional route. A later sale, redemption, contribution, donation, payment of an earn-out or return to France may then alter the deferral or the amount ultimately payable. The event calendar must be maintained after departure rather than archived with the initial return.
The documents a defensible file should contain
A complete review starts with the dates and evidence of French residence, the planned transfer date and the destination. It then maps every direct and indirect holding of the tax household, acquisition history, reorganisations, tax basis, past deferrals, shareholders’ agreements, earn-out clauses and transactions already contemplated. The legal analysis should reconcile that inventory with the version of the law and the official forms applicable to the year of departure.
For unlisted shares, a figure unsupported by a valuation file is not enough. Accounts, current trading, debt, cash, shareholder rights, preference clauses, recent arm’s-length transactions and credible forecasts may all affect value. The objective is a reasoned position that can be explained later, not an artificially low estimate. Where a sale, fund-raising or restructuring is being discussed, contemporaneous documents should be preserved and inconsistencies addressed before the return is filed.
The final work product should include a scope memorandum, an asset and tax-basis schedule, the valuation support, the applicable deferral analysis, a filing calendar and a list of events that require a new review. It should also identify assumptions that remain uncertain. No donation, holding-company insertion or accelerated transaction is a universal exit-tax solution; each may have separate tax and anti-abuse consequences.
Practical example: founder equity before a possible sale
Assume a founder plans to move abroad while discussions with a buyer are preliminary. The first question is not whether to sell before or after leaving. The file must first establish the residence-transfer date, the securities and holding chain, their defensible market value at that date, any pre-existing tax deferral, and the destination-country deferral conditions. Only then can alternative sequences be compared. If the negotiations later mature, the sale documentation must be reconciled with the departure valuation and the required follow-up assessed. Different facts can reverse the conclusion, so this illustration is a method, not advice for a particular taxpayer.
Official starting points
Read the current text of article 167 bis CGI on Légifrance and use the official 2074-ETD page to select the form and notice matching the actual departure year. These sources provide the legal and filing framework; they do not replace a fact-specific analysis of residence, valuation, treaty position and later transactions.
Frequently asked questions
Who is concerned by French exit tax?
A taxpayer meeting the applicable French-residence condition may be concerned where the departure involves qualifying securities meeting the statutory thresholds, earn-out receivables or gains already under a listed French tax deferral. The conditions differ by component.
Is Dubai a special case?
Dubai requires a specific France-UAE analysis because the French exit tax regime, payment deferral and tax residence evidence must be reviewed together.