Exit Taxes (Departure Tax on Emigration): FAQ
Exit tax is the one-time deemed-disposal tax some countries impose when a resident ceases to be tax-resident there. It can be the single largest tax cost of an international move — particularly for founders with material appreciated equity. The applicability and mechanics vary substantially by country.
Data as of 2026. Sources: OECD, PwC, KPMG, Tax Foundation. Not advice.
What is an exit tax?
A tax some countries impose when a tax resident emigrates. It typically treats the departing resident as having sold all (or specified categories of) their assets at fair market value on their last day of residency, with the unrealised gain taxed as if realised. The aim is to capture appreciation that occurred during the residency period before the person moves to a lower-tax jurisdiction.
Which major countries have exit taxes?
Canada (Section 128.1 deemed disposition), Australia (CGT events I1 and I2), Germany (Section 6 AStG, substantially tightened 2022), France (Article 167 bis, reformed 2019), the Netherlands (substantial-interest exit tax with 10-year deferral), Norway (expanded 2022 to cover most shares), and the US (for citizenship renouncers and long-term green-card-holders only — "covered expatriates"). The UK, Italy, Spain (limited), most low-tax destinations, and most LATAM/Caribbean jurisdictions have no general exit tax. See the /guides/exit-taxes-explained/ guide for full mechanics.
Does the US exit tax apply if I just move abroad without renouncing?
No. The US exit tax applies only to citizenship renouncers and long-term lawful permanent residents who give up green-card status after holding for ≥8 of the past 15 years. US citizens who move abroad while keeping citizenship face no exit tax — they remain subject to worldwide US taxation but with FEIE ($132,900 for 2026) and Foreign Tax Credit offsets. Renunciation triggers covered-expatriate exit tax only if net worth ≥$2M, 5-year average tax liability above an indexed threshold (~$206k for 2026), or tax non-compliance certification on Form 8854.
Was the Canadian capital gains inclusion-rate hike to 66.67% still happening for 2026?
No. The proposed increase from 50% to 66.67% on annual gains above CAD 250,000 was cancelled by the Carney government in March 2025. The 50% inclusion rate continues to apply, including for the Section 128.1 deemed-disposition exit tax. The Lifetime Capital Gains Exemption bump to CAD 1.25M on qualified small-business and farming/fishing property was kept.
Can the exit tax be deferred?
Yes in most regimes, with security: Germany 7-year installment plan; France automatic deferral for EU destinations, with security for non-EU; Netherlands 10-year deferral against security (forgiven if asset held to maturity); Norway phased relief over 12 years; Canada section 220(4.5) election with security pledged to CRA; Australia stop-the-clock election to keep asset in the Australian CGT net. Each regime has specific eligibility and security requirements that warrant specialist review.
How do I plan around exit tax before moving abroad?
Standard considerations: (1) trigger appreciated-asset sales pre-departure if standard CGT rates beat exit-tax rates; (2) time departure relative to the tax year to optimise the assessment window; (3) restructure shareholdings below substantial-interest thresholds (Germany, Netherlands, France) to avoid exit-tax application; (4) use available deferral mechanisms; (5) coordinate source-country exit-tax position with destination-country treaty residency; (6) plan for residence-based IHT tails like the UK 10-year post-departure window. Specialist pre-departure advice is essential.
Need help turning the data into a plan?
TaxAtlas covers the rates and rules. For the personal side — exit planning, residency strategy, business structure, or filings — request a response and we'll point you to relevant research or a vetted specialist.
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