Change of Tax Residency
Axtead supports executives, investors, and families in securing their change of tax residency, whether departing from or relocating to France.
Our assistance includes a comprehensive analysis of the core challenges related to international mobility:
- Exit Tax and the taxation of unrealized capital gains upon departure;
- Tax residency conflicts (analysis of domestic law versus tax treaty criteria);
- Optimization of bilateral tax treaties;
- Estate and succession planning in the host country.
We intervene proactively prior to departure to anticipate risks, structure assets (companies, trusts, financial or real estate assets), and ensure legal and tax continuity for your wealth.
For those arriving in France, we analyze eligibility for the impatriate tax regime (article 155 B of the French Tax Code) and assist with full tax compliance (Form 2042, IFI, foreign bank account disclosures, etc.).
Our goal is to ensure seamless, secure, and compliant mobility within an optimized legal and tax framework.
Questions
Yes, you may be subject to the Exit Tax if you transfer your tax residency outside of France and meet both of the following cumulative conditions:
- You have been a French tax resident for at least six of the ten years preceding your departure.
- You hold:
- Either shares or rights with an overall aggregate value exceeding €800,000;
- Or a stake of more than 50% of the profit rights in a company.
The Exit Tax triggers the immediate taxation of unrealized capital gains on these assets. However, taxpayers may qualify for a tax deferral in specific cases.
France may continue to exercise its right of taxation on estates or gifts, even after you move abroad, in the following cases:
- The donor or the deceased is a tax resident of France;
- The transferred property is located in France (real estate or tangible movable property);
- The beneficiary (donee, heir, or legatee) has been a French tax resident for at least six of the last ten years.
Where an international tax treaty exists between France and your country of residence, a specific analysis is required to determine which State has the taxing rights over the transferred assets. This step is essential to avoid double taxation and to structure the transmission within a secure framework.
Yes, subject to certain conditions. The Impatriate Tax Regime (article 155 B of the French Tax Code) applies to employees and executives recruited from abroad by a French company (or an affiliated entity) to work in France. To qualify, you must notably:
- Not have been a French tax resident during the five calendar years preceding your arrival;
- Be recruited directly by an entity established in France;
- Perform an effective professional activity in France;
- Receive additional compensation specifically linked to your relocation.
This regime allows for a partial income tax exemption on certain compensation components for a maximum duration of eight years.
Its implementation requires a personalized analysis and meticulous tax compliance to secure these benefits and mitigate the risk of a challenge by the tax authorities.
