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TAXES

Explained: France’s exit tax

Planning on leaving France? You may, depending on your circumstances, be charged the 'exit tax'.

Published: 11 April 2024 11:28 CEST
Explained: France's exit tax
(Photo by MIGUEL MEDINA / AFP)

Like some other European countries, France does have an exit tax for those (French or foreign) who are leaving the country. It’s known by the English name l’Exit tax.

However, it won’t affect most people.

Only those who have been tax resident for a minimum six years of the 10 years immediately before they permanently move out of the country are liable to pay an exit tax – if, that is, they own property, titles or rights worth a minimum of €800,000, or that represent 50 percent of a company’s social profits.

If that affects you, the best advice is to seek expert individual financial advice before moving out of France for good. The relevant page on the French government’s impot.gouv.fr website says it is possible to defer payments, and some relief is available.

Because of the relatively high figures involved, this tax is irrelevant for most people. That said, however, you will still have to inform tax authorities that you are moving out of the country because you may still have income, property and capital gains taxes to pay.

Income tax

You must inform the tax office that you are moving and give them your new address so that your tax declarations can be transferred to your new address.

You are liable for tax on everything you earned in France prior to your departure as well as on any French earnings that are taxable in France under international tax treaties that you earned after your departure.

The year of your departure, you declare your previous year’s earnings as normal – declarations in spring 2024 are for earnings in 2023.

A year later, you will have to declare any earnings taxable in France from January 1st up to the date of your departure, and any French-sourced income taxable source until December 31st of the year of your departure.

If you continue to have any French-sourced income – such as from renting out a French property – you will have to declare that income annually, using the non-residents declaration form.

Property taxes

You will have property taxes to pay if you own a French property on January 1st of any given year – whether it is occupied or not. 

Property tax bills come out in the autumn, but they refer to the situation on January 1st of that year, so even if you sell your property you will usually have the pay a final property tax bill the following year.

Moreover, if you receive income from property in France or have rights related to that property (such as shared ownership or stock in property companies), as well as any additional revenue connected to the property, during the year you leave France, you will be required to pay taxes on these earnings.

If any property assets in France exceed €1.3 million on January 1st of a given year, you may also have to pay the wealth tax (IFI).

READ ALSO What is France’s wealth tax and who pays it?

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Capital gains tax 

If you sell your French property or share of a French property, you may be liable for capital gains tax at a rate of 19 percent. It will also be subject to social security contributions at the overall rate of 17.2 percent.

Capital gains tax varies depending on how long you have owned the property and whether it was a second home or your main residence.

READ ALSO How much capital gains tax will I have to pay if I sell my French property?

The good news is, if you move to another EU country, or any country that has a specific tax agreement with France, you may be exempt from capital gains tax for non-resident sellers on the sale of a property that was your principal residence in France.

If you move elsewhere, you may be able to claim exemption on capital gains tax up to €150,000. As always, you should seek expert financial advice.

Tell Social Security

Inform social security that you are leaving France permanently – and return your carte vitale if you have one. If you do not, you may be liable for any benefits you receive to which you are no longer entitled.

More mundane tasks involve informing utility and water companies, your internet provider, if you have one, the phone company, your insurance companies, banks – and La Poste, who will be able to forward your mail for up to 12 months, for a fee…

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TRAVEL NEWS

Can I use my French carte de séjour for travel?

The carte de séjour is an official document attesting to your right to live in France - but can it be used as a travel document?

Published: 14 May 2024 16:09 CEST
Can I use my French carte de séjour for travel?

Travel within the EU’s Schengen zone is usually a fairly slick business with reduced or no checks as you cross borders – but that doesn’t mean that you can leave your passport at home.

So integrated is the Schengen Area that if you’re travelling by car or train you may not even notice that you’ve crossed a border and entered another country until you start to see signs in a different language – and that’s the intention of the zone of free movement, created in 1995.

But while EU/EEA citizens can move freely within the zone, it’s a different story for non-EU/EEA citizens.

The rules

Borders between countries in the EU/Schengen area still exist and in order to cross an international border you will need a valid travel document – for EU citizens this can be a national ID card, but for non-EU citizens that means a passport.

France’s carte de séjour residency permit is neither of these – it is not a valid travel document and nor is it an ID card (although it can function as proof of ID in non-travel scenarios such as picking up a parcel from the post office). Technically the card is a ‘titre’ – title – which acts as proof of your status as a resident. 

If you try to cross a border without a valid passport you can be turned back.

The carte de séjour acts as proof of your right to live in France and your right to re-enter the country if you have left, so it’s a good idea to have this with you. If you travel without it, you may have your passport stamped as a visitor when you re-enter France. 

If your passport is stamped in error this may cause delays and questions when you next cross a border, but you cannot be penalised or denied entry provided you can show a valid carte de séjour.

On the ground 

As is often the case, there’s a difference between what the rule book says and what happens on the ground, and this is particularly apparent for travel within the Schengen area.

In practice, it’s common to cross a border with no checks at all – although things tend to be stricter if you are travelling by plane.

Cars and trains often pass through with no checks, or with checks when guards will happily accept a carte de séjour.

However checks do happen – sometimes this is in response to a security alert, for example after a terror attack, but sometimes it’s random or when the border police are training their new recruits. We regret to say that there is often an element of racial profiling, so travellers of colour are more likely to be asked to produce their travel documents.

Cars can be pulled over at border checkpoints while if you’re travelling by train, police will often board the train close to the border and check passengers.

If you are asked, you will need to show your passport – so don’t forget to take it within you when travelling within the EU and Schengen zone. 

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