France introduced a new exit tax in 2011 for individuals who have been tax resident in France for at least 6 out of the preceding 10 years who move their tax residency abroad.
The exit tax consists of the taxation of latent gains relating to participation of 1% or more in the profits of a French or foreign company or to a participation worth more than EUR 1.3 million. The purpose of the exit tax is to target individuals who move their tax residence to avoid the taxation of capital gains on the disposal of a substantial shareholding. The payment of the exit tax may, under certain conditions, be postponed temporarily or indefinitely when the transfer of residence is not motivated by tax reasons.
The scope of the exit tax has now been extended to include individuals with participation of less than 1% in several companies where their cumulative value exceeds the EUR 1.3 million threshold.
Third Amending Finances for 2011 (loi de finances rectificative pour 2011)