An exit tax is a tax on persons who cease to be tax-resident in a country. It is usually a form of capital gains tax against unrealized gains.
Exit tax can get triggered by a change of domicile, tax residence, loss of a country's right to tax the gains, transfer of assets to a non-resident. In the United States, the tax is formally called expatriation tax and is levied upon abandoning American citizenship or green card by long-term residents.
Details Exit taxes serve to protect the tax base, preventing capital gains tax avoidance through emigration. They typically target unrealized capital gains by treating the assets for tax purposes as being sold at fair market value upon emigration (so-called deemed disposal) and taxing the resulting gains, but implementation details vary significantly between countries: The tax rate is usually the same as regular capital gain tax rate. The tax base tends to be the difference between the fair market value at departure and the original acquisition value. Some countries grant a step-up in cost basis at immigration and thus tax only the gains accrued during the tax residency. Some countries allow deferring the payment until the assets are sold. Waiver of exit tax might be possible under some circumstances: if the individual later returns to the country, or holds the assets without selling for a certain number of years. Non-financial assets (real estate, jewelry, etc.) are often excluded from the scope of exit tax. Many countries prescribe a minimum number of residency years before an exit tax becomes applicable. A minimum threshold on assets or net worth can be prescribed to minimize the required bureaucracy. Some countries implement other anti-avoidance rules besides deemed disposal: extended/trailing residency (e.g. UK, Ireland), reversal of burden of proof (e.g. Italy, Portugal), etc.
A related but distinct concept is corporate exit tax, triggered by relocating a company to another country. Both taxes may get triggered by the same relocation: an emigrating business owner may move the company's tax residence with them due to place of effective management or Controlled Foreign Company rules in the destination country. In the EU, this is mandated by Anti-Tax Avoidance Directive (ATAD) in all member states.
By country Australia Australia imposes an exit tax when an individual stops being a tax resident: assets are deemed to have been sold at the market value on departure (deemed disposal), except for taxable Australian property (like real estate). Conversely, assets are deemed to have been acquired at the market value on the day of becoming a tax resident (deemed acquisition or step-up in cost basis). There is an exemption for temporary residents (mainly, people on temporary visas). The gain is taxed at ordinary income tax rates: up to 45% plus Medicare levy; 50% CGT discount may apply in certain cases. Tax can be deferred until the actual sale, however the assets would get reclassified as taxable Australian property until then.
Austria Exit tax applies when Austria loses the right to tax gains on capital assets, whether due to the taxpayer moving abroad or any other circumstance. The event is treated as a deemed disposal of assets at fair market value. Standard CGT rate is 27.5%. Tax can be deferred indefinitely until the actual sale, but only if moving within EU/EEA. There is no minimum threshold on assets or period of residence — once tax residency is established, losing it triggers the tax. A person is generally regarded as a tax resident after a 6 months stay.
Belgium Belgium introduced a comprehensive capital gains tax regime for individuals in 2026, along with a related exit tax. The changes apply retroactively from 1 January 2026, with a step-up in cost basis — only the gains accrued from that date are taxable. Standard CGT rate is 10%. Emigration is treated as a deemed disposal of assets. However, the tax can be deferred for 2 years until the actual sale and waived completely if the assets are not sold within 2 years or the taxpayer returns to Belgium. Deferral is granted automatically if moving within EU/EEA, else requires collateral.
Canada Canada imposes a departure tax when an individual ceases to be a Canadian tax resident: most property is deemed to have been sold at fair market value on departure (deemed disposition), with gains subject to ordinary capital gains tax. Main exceptions include taxable Canadian property (like real estate), registered plans, and property owned before becoming a Canadian resident by short-term residents (less than 5 in the past 10 years). Conversely, most property is deemed to have been acquired at fair market value on the day of becoming a Canadian resident, so the taxable gain is generally based on the difference between the market value on the date of arrival in Canada (or later acquisition) and the market value on the date of departure. As of 2026, top capital gains tax rate is 27.4%. Payment of departure tax can be deferred until the actual sale, with collateral required above a certain threshold.
Tax residency is based on residential ties, not just days of presence. Leaving Canada without severing them wouldn't terminate tax residency, leaving one liable to Canadian taxes on worldwide income and gains. Treaty tie-breakers can override this and make someone a deemed non-resident, triggering departure tax.
Denmark For shares, exit tax (fraflytterskat) normally applies to portfolios from (approx. ) and if the individual was fully liable to Danish tax for at least 7 of the past 10 years. Full tax liability status matters for counting the years, not just treaty tax residency status. Shares are deemed to be disposed at the day of departure; tax rate is 27%/42%. Tax can be deferred (henstandssaldo), subject to annual compliance obligations and possibly collateral if moving outside the EU/Nordics.
Eritrea Eritrea levies a yearly 2% Recovery and Rehabilitation Tax on the worldwide income of its citizens living abroad, also commonly called diaspora tax. It is thus one of the few countries (along with the US) that practices a citizenship-based taxation. The tax has been criticized by a number of governments for intimidation practices in its collection and alleged use in funding Eritrea's war efforts.
Finland No general exit tax on unrealized gains for individuals. There is an exception for deferred gains from certain tax-neutral share exchanges. Additionally, Finnish citizens are deemed to remain tax residents for 3 years after departure unless they prove that substantial ties with Finland have ended.
France According to the law "L'impôt sur les plus-values latentes en cas de transfert du domicile fiscal hors de France" Article 167 bis Code général des impôts, there is a rule forcing French tax-subjects to pay a tax if they move abroad to certain countries and not return promptly. France's exit tax applies to individuals who have been tax residents in France for at least 6 of the last 10 years before their departure and have ownership of more than €800,000 worth of shares or other financial instruments, or are holding more than 50% of the shares in a company. A deferral of payment is possible if the person relocates to an EU/EEA country or a country with a tax treaty with France that includes administrative assistance. If the individual retains the assets for a certain period (usually 15 years) or returns to France to become a tax subject, the tax may be canceled.
Germany Germany has a long history of taxing emigration. The most famous example being the Reich Flight Tax implemented in 1931 to stem capital flight during the unstable interwar period. After seizing power in 1933, the Nazi government largely used the tax to confiscate assets from persecuted people, mostly Jews, who sought to flee Nazi Germany.
Contemporary legislation traces back to the scandal with Helmut Horten, a department-store magnate who moved to Switzerland in 1968, sold his business stake and paid virtually no tax. The event prompted enactment of the Foreign Tax Act (Außensteuergesetz) in 1972, whose exit-tax provision (§ 6 AStG) is nicknamed lex Horten.
As of 2026, exit taxation (Wegzugsbesteuerung) is triggered for certain assets when an individual loses unlimited German tax liability, after being subject to it for at least 7 of the past 12 years. Gifting or inheritance to a non-resident or another event by which Germany loses the right to tax the gains may trigger the tax as well. The law has historically targeted substantial ownership in corporations (at least 1% share since 2002). From 2025, the scope was extended to investment funds (such as mutual funds and ETFs) with acquisition costs of at least €500,000 in a single fund or at least 1% share within the past 5 years, and special investment funds with no minimum threshold. Affected assets are deemed disposed at fair market value. Gain is taxed as partial income (Teileinkünfteverfahren) with an effective tax rate of up to roughly 28.5%, plus church tax if applicable. Payment can be split into 7 equal interest-free yearly installments, if collateral is provided.
German exit tax applies to ownership in any corporation, from large publicly-traded companies to smallest one-person business entities. Unlisted shares are usually valued using standardized methods, such as vereinfachtes Ertragswertverfahren: 13.75× average annual profit, with a floor at the company's book value. This can assign a substantial value even to young or loss-making firms, producing a tax bill disconnected from any realistic sale price and payable in cash regardless if any shares are or can be sold. It is criticized as one of the biggest "mobility blockers" in German tax law, locking-in entrepreneurs and discouraging start-ups.
Additionally, German law has a concept of extended limited tax liability. It applies for up to 10 years to German citizens who were tax residents for at least 5 of the previous 10 years, move to a low-tax jurisdiction, and retain substantial economic interests in Germany.
Ireland No general exit tax on unrealized gains for individuals. However, Ireland has a provision for taxing former residents: an individual becomes ordinarily resident after 3 continuous years of tax residence, and remains so for 3 years after leaving. During these years, depending on their domicile status, Ireland may continue to tax their worldwide income and gains, or at least the portion that is remitted to Ireland. Investments in Irish ETFs and mutual funds, as well as "similar in all material respects" to them offshore funds, are subject to deemed disposal every 8 years; gains are classified as "Case IV" income, automatically within the scope of Irish tax, and thus may get taxed during this 3 year ordinarily residence tail.
Iceland No general exit tax on unrealized gains for individuals. However, former residents remain fully tax liable for 3 years after departure, unless they prove that they have become subject to taxation in another country.
Israel Individuals are deemed to have sold their assets the day before ceasing their tax residence in Israel. Standard CGT rate is 25%. Tax may be deferred until the actual sale. Assets owned before becoming Israeli resident may be exempt for 10 years.
Italy No general exit tax on unrealized capital gains for individuals. There is an anti-avoidance rule: Italian citizens moving to certain low-tax jurisdictions are presumed to remain tax residents unless they prove otherwise. Tax residence may also continue through residential or close family ties in Italy.
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