Exit Tax in France: Planning Your Move to Bulgaria (2026)

France's exit tax is one of the most significant obstacles for French entrepreneurs considering relocation to a lower-tax EU jurisdiction. If you have been a French tax resident for at least 6 of the last 10 years and hold EUR 800,000 or more in securities (or a 50%+ shareholding in any company), the French tax authorities will assess a deemed capital gains tax on the day you leave. The good news: moving to Bulgaria — an EU member state — triggers an automatic deferral with no guarantees required and no upfront payment.

This guide explains exactly how the French exit tax works, who is affected, how the EU deferral applies to Bulgaria, what changed under the 2026 Finance Act, and how to plan your move to minimize complications. We use verified 2026 rules throughout.

What Is the French Exit Tax?

The French exit tax (impot de depart or exit tax) is a tax on unrealized capital gains triggered by the transfer of your tax residence out of France. It was introduced in its current form in 2011 and has been modified several times since.

When you leave France, the tax authority (Direction Generale des Finances Publiques) treats your securities as if they were sold on the date you transfer your tax residence. The difference between the fair market value on the date of departure and the original acquisition cost becomes a deemed capital gain, subject to tax.

Critically, this is a paper exercise. You do not actually sell anything. You do not receive any cash. But you have a tax liability on paper that must be declared and — depending on where you move — either paid immediately or deferred.

Who Is Affected: The Two Cumulative Conditions

The French exit tax applies when both of the following conditions are met simultaneously:

1. Residency condition: You have been a French tax resident for at least 6 of the last 10 years preceding the transfer of tax residence.
2. Asset condition (either one):
   • You hold securities (stocks, bonds, mutual fund units, etc.) with a total fair market value of EUR 800,000 or more on the date of departure, OR
   • You hold a 50% or greater shareholding in any company (French or foreign), regardless of value.

Both conditions must be met. If you have been a French resident for only 4 years, the exit tax does not apply regardless of your portfolio value. If you have been resident for 8 years but hold EUR 500,000 in securities with no 50%+ shareholdings, it also does not apply.

How the Exit Tax Works: Deemed Disposal

Once triggered, the exit tax operates as follows:

1. Valuation date: The fair market value of all in-scope securities is determined on the date of transfer of your tax residence out of France.
2. Deemed gain calculation: For each security, the gain is: Fair market value on departure date minus acquisition cost.
3. Aggregation: All deemed gains (and losses) across your entire portfolio are aggregated.
4. Tax assessment: The net deemed gain is taxed at the applicable rate (see below).

Unrealized losses can offset unrealized gains within the exit tax computation. If your total portfolio shows a net unrealized loss, no exit tax is due.

The Exit Tax Rate: 30% PFU

The exit tax is assessed at the 30% PFU (prelevement forfaitaire unique, or flat tax), which consists of:

• 12.8% income tax
• 17.2% social contributions (prelevements sociaux)

This is the same rate that applies to actual capital gains on securities in France. The exit tax simply accelerates the timing of the assessment.

Example calculation

You own 100% of a French SAS. You acquired the shares at incorporation for EUR 10,000. On your departure date, the company is valued at EUR 500,000. Your deemed gain is EUR 490,000. At 30% PFU, the exit tax assessment is EUR 147,000. If you move to Bulgaria (EU), this amount is assessed but not collected — it is automatically deferred.

EU Automatic Deferral: Moving to Bulgaria

This is the single most important rule for French entrepreneurs moving to Bulgaria: the exit tax payment is automatically deferred when you transfer your tax residence to another EU or EEA member state.

Because Bulgaria is an EU member state, the deferral is:

• Automatic — you do not need to request it
• Unconditional — no bank guarantees, no pledges, no deposits required
• Immediate — applies from the date of your departure

The tax is assessed on your final French tax return (via Form 2074-ETD) but payment is suspended. The French tax authority records the liability but does not collect it. You simply declare the exit tax and note that deferral applies because your destination is an EU member state.

What about non-EU moves?

If you were moving to a non-EU/EEA country (e.g., Switzerland, UAE, UK post-Brexit), the deferral is not automatic. You would need to request it at least 90 days before departure and may be required to provide guarantees (typically a bank guarantee or pledge of securities). This is one of the significant advantages of choosing an EU destination like Bulgaria.

2026 Finance Act: The 15-Year Monitoring Period

The 2026 Finance Act made a significant change to the exit tax regime: it restored a 15-year monitoring period.

This means the exit tax assessment remains active for 15 years after your departure from France. During this period:

• If you sell the securities, the deferred exit tax becomes payable (with credit for Bulgarian tax paid on the same gain).
• If you gift the securities, the exit tax may become payable depending on the recipient and structure.
• If you return to France and re-establish tax residency, the exit tax is cancelled.
• If you still hold the securities after 15 years without having sold them, the exit tax is cancelled entirely.

This 15-year period is a significant extension. It means that to fully eliminate the exit tax through the passage of time, you must hold your securities for 15 years after leaving France without disposing of them.

Forms and Filing Obligations

The French exit tax requires specific filings both at departure and annually during the monitoring period:

At departure: Form 2074-ETD

Form 2074-ETD (Exit Tax Declaration) must be filed with your final French tax return for the year of departure. This form:

• Lists all securities subject to the exit tax
• Declares the fair market value of each security on the date of transfer of tax residence
• Calculates the deemed gain or loss on each position
• Computes the total exit tax liability
• Notes whether deferral applies (EU destination = automatic deferral)

Annual follow-up: Form 2074-ETS

Form 2074-ETS (Exit Tax Annual Follow-up) must be filed each year during the monitoring period. This form reports:

• Whether you still hold each security declared on the 2074-ETD
• Any disposals, gifts, or other events affecting the securities
• Your current tax residence (to confirm you have not returned to France)

France-Bulgaria Double Tax Treaty

The France-Bulgaria Double Tax Treaty was signed in 1987 and entered into force in 1988. It governs how income and gains are taxed when a person has connections to both countries.

For the exit tax, the treaty interaction works as follows:

• France claims the right to tax at departure — the exit tax assesses a deemed gain on the date you leave France.
• Bulgaria taxes at disposal — when you actually sell the securities as a Bulgarian tax resident, Bulgaria may tax the real capital gain.
• During deferral: no double taxation — while the exit tax is deferred and you have not sold anything, no double taxation occurs. France has assessed but not collected; Bulgaria has nothing to tax because no sale has occurred.
• At actual sale: If you sell while a Bulgarian tax resident, the treaty's capital gains article determines allocation of taxing rights. You may receive a credit against the French exit tax for Bulgarian tax paid on the same gain, avoiding double taxation.

Planning Your Move: Timeline and Steps

Here is a recommended timeline for French entrepreneurs planning to relocate to Bulgaria:

1. 12-6 months before departure: Engage a French tax advisor to calculate your exit tax exposure. Inventory all securities and shareholdings. Determine fair market values. Identify whether both conditions (6/10 years residency + EUR 800K or 50% shareholding) are met.
2. 6-3 months before: Begin structuring your Bulgarian setup. Register a Bulgarian EOOD if needed. Arrange a registered address and begin the residence certificate process with the Bulgarian Migration Directorate.
3. 3-1 months before: Prepare Form 2074-ETD with your French tax advisor. Formally establish your new Bulgarian tax residence — see our tax residency guide. Notify French authorities of your change of residence.
4. Departure date: This is the valuation date for all exit tax securities. Ensure the date is clearly documented and consistent across all filings.
5. After departure: File your final French tax return including Form 2074-ETD. Begin filing Form 2074-ETS annually. Confirm Bulgarian tax residency with the NRA. Set up your Bulgarian accounting and tax compliance.

Common Mistakes to Avoid

1. Forgetting the 50% shareholding trigger. Many entrepreneurs focus on the EUR 800,000 securities threshold and overlook that owning a majority of any company — even a small one — triggers the exit tax if the residency condition is also met.
2. Not filing Form 2074-ETD with the departure return. The exit tax declaration is not optional, even when deferral applies. Failure to file can trigger penalties and complicate the deferral.
3. Skipping annual 2074-ETS filings. Each year during the 15-year monitoring period, you must file the follow-up form. Missing a year can be treated as a triggering event.
4. Selling securities early without planning. If you sell within the 15-year monitoring period, the deferred exit tax becomes payable. Plan any disposals carefully, considering both French and Bulgarian tax implications and treaty credits.
5. Not establishing genuine Bulgarian tax residency. France can challenge your departure if you maintain your centre of vital interests in France. Ensure you have a genuine Bulgarian residence, economic activity, and spend at least 183 days in Bulgaria. Deregister your French tax residency properly.
6. Ignoring the interaction with Bulgarian tax. When you eventually sell securities as a Bulgarian tax resident, Bulgaria's 10% flat income tax applies to the capital gain. Coordinate with both French and Bulgarian advisors to ensure treaty credits are properly claimed.

Frequently Asked Questions

Disclaimer: This article provides general guidance on the French exit tax based on current legislation as of April 2026, including the 2026 Finance Act. The exit tax is a complex area of French tax law and individual circumstances vary significantly. Social contribution rates are subject to change and the 30% PFU rate cited may be higher in 2026. This article does not constitute legal or tax advice. For personalized guidance on the French exit tax, consult a qualified French tax advisor. For Bulgarian tax residency and company formation, contact our team. Last updated: April 7, 2026.