Exit taxes are levies imposed on individuals who give up their tax residency or citizenship.
These taxes typically apply to unrealized capital gains—the appreciation in value of assets such as stocks, businesses, or other investments—at the moment someone is no longer subject to a country’s tax jurisdiction.
Rather than waiting until the assets are sold, the government treats them as if they were sold at fair market value on the day of departure.
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Questo vale anche per chi è alla ricerca di un secondo parere o di investimenti alternativi.
Alcuni fatti potrebbero cambiare rispetto al momento della stesura del presente documento e nulla di quanto qui scritto rappresenta una consulenza finanziaria, legale, fiscale o di qualsiasi tipo, né una sollecitazione a investire.
The rationale behind exit taxes is to prevent tax avoidance. Without such rules, high-net-worth individuals could accumulate gains in one country, then move abroad to sell their assets tax-free in a jurisdiction with lower or no capital gains tax.
Exit taxes aim to close that loophole.
What is an Exit Tax? How Does Exit Tax Work?
Exit taxes are based on the concept of a “deemed disposition,” a legal fiction in which certain assets are treated as if they were sold at their current value on the date of departure.
The individual is taxed on any unrealized gain, even though no sale has actually occurred. This mechanism ensures that gains accrued under one country’s tax system do not escape taxation due to relocation.
Exit tax liability is typically triggered when:
- A person renounces citizenship (e.g., in the United States)
- An individual ceases to be a tax resident, usually by moving abroad or staying outside the country for a certain number of days
Not all assets are always subject to exit tax. Commonly taxed items include:
- Publicly traded securities
- Shares in private companies
- Intellectual property or business interests
- Cryptocurrency and collectibles
Some countries exclude certain asset classes, such as primary residences, retirement accounts, or local real estate. The precise scope varies by jurisdiction.
Payment Timing and Deferral
Some countries require immediate tax payment upon departure. Others allow deferral, often with interest, collateral, or a guarantee:
- Deferral options may be automatic or require approval
- Interest charges may apply on deferred amounts
- Payment is still due if the asset is eventually sold or the taxpayer does not return
Valuation Requirements
To determine the amount of tax owed, individuals must establish the fair market value of relevant assets as of the exit date. This typically involves:
- Independent professional valuations
- Documentation of basis (original purchase price)
- Supporting records for both domestic and foreign assets
Accurate valuation is critical. Overvaluation leads to excessive tax; undervaluation risks penalties or audit challenges.
When dealing with tax residency, it is highly recommended to consult a tax attorney or consulente finanziario.
10 Countries with Exit Tax (as of 2025)
Exit tax policies vary significantly by jurisdiction. While many countries apply these taxes only to high-net-worth individuals or specific asset types, others impose broader rules on departing residents.
Below is an overview of countries currently enforcing exit taxes.
Stati Uniti
Who is affected: U.S. citizens and long-term residents (8 of the last 15 years) who meet any of the following:
- Net worth exceeds $2 million
- Average annual net income tax liability for the five years before expatriation exceeds $206,000
- Failure to certify tax compliance for the past 5 years
Mechanism: A “mark-to-market” tax on the unrealized gains of worldwide assets above a $890,000 exclusion.
Payment: Tax is due upon expatriation. Certain deferred compensation and trust interests are taxed separately.
Canada
Who is affected: Individuals who cease to be tax residents.
Mechanism: Deemed disposition of most worldwide assets at fair market value. Exemptions include:
- Canadian real estate
- Canadian business property
- Registered retirement savings plans (RRSPs)
- Personal-use items below a value threshold (CAD 10,000)
Payment: Exit tax payable in the year of departure. Deferral is available with adequate security.
Australia
Who is affected: Individuals ending Australian tax residency.
Mechanism: Deemed disposal of CGT (capital gains tax) assets for their market value at the time of expatriation, except for any taxable Australian property.
Payment: Tax payable in the year of departure unless deferral is elected and approved.
Francia
Who is affected: Departing residents who
- Were French tax residents for at least 6 of the last 10 years
- Hold company shares valued over €800,000, or ≥50% representation of a company’s profits.
Mechanism: Exit tax on unrealized capital gains, receivables originating from an earn-out clause, and capital gains realized subject to tax deferral.
Payment: Deferral is possible when relocating to another EU/EEA country or treaty jurisdiction. Deferred tax becomes payable upon sale of the asset or move to a non-compliant country.
Germany
Who is affected: Individuals who have been residents in Germany for at least seven of the last twelve years and
- holding at least 1% of a company’s share capital or investment fund units issued by an investment fund in the last five years or,
- spent at least €500,000 as acquisition costs for the fund units
Mechanism: Tax on unrealized gains from substantial shareholdings, holdings in investment funds, or certain private business assets when moving abroad.
Payment: Previously automatic within the EU/EEA, now more limited; payment due upon departure, although installment payments might be possible in certain cases.
Netherlands
Who is affected: People with significant shareholdings (≥5%) who cease Dutch tax residency.
Mechanism: Deemed capital gains tax on unrealized appreciation upon departure. From 2025, tax liability may follow the individual for up to five years, with ongoing tax obligations even after departure.
Payment: Installment is allowed over the five years only if the new country of residence is within the EU/EEA.
Norway
Who is affected: Norwegian residents who decide to leave the country and have latent gains over NOK 3,000,000
Mechanism: Exit tax on latent gains on financial assets. Even if the value of the underlying assets decrease after the exit, the exit tax is still calculated based on the value at the time of leaving Norway.
Payment: may be deferred for up to 12 years.
Spagna
Who is affected: Individuals who
- Have been tax residents for 10 of the last 15 years and
- Hold shares valued over €4 million, or
- Own ≥25% of a company with shares worth more than €1 million
Mechanism: Exit tax on latent capital gains of such holdings.
Payment: may be deferred in the event of temporary relocation for work reasons or if the relocation is to a country or territory with tax treaties. If taxpayer status is acquired again without any transfer of the shares or interests, the deferred debt and any accrued interest can be waived.
Sudafrica
Who is affected: Residents formally emigrating and ceasing tax residency who has the worldwide assets valued over the basic allowance.
Mechanism: Deemed disposal of worldwide assets, excluding South African real estate and certain retirement funds. Must file with SARS and obtain tax clearance. Declaration of all global assets is mandatory.
Japan
Who is affected: Individuals with ¥100 million+ in financial assets and who have been residents for at least 5 of the last 10 years.
Mechanism: Tax on unrealized capital gains of applicable assets at time of departure.
Payment: Deferral for 5 or 10 years is possible if you meet certain requirements such as appointing a tax agent in Japan, submitting an assets report, providing a collateral and agreeing to pay interests.
How to Minimize Exit Tax
Exit taxes can create significant financial burdens for globally mobile individuals, especially those with appreciated assets, private equity stakes, or complex compensation structures.
Fortunately, with advance planning, it is possible to reduce, defer, or even eliminate certain exit tax obligations.
Asset Restructuring Before Departure
One of the most direct ways to minimize exit taxes is to restructure your asset portfolio before triggering a tax event.
Key strategies include:
- Selling taxable assets while still resident, allowing capital gains to be taxed under the local regime, possibly benefiting from exemptions or losses to offset gains.
- Gifting assets to family members or fiducia, where allowed, before departure. Note that this can have other tax implications (e.g., gift taxes or future tax residency of the recipient).
- Moving assets into exempt structures, such as:
- Retirement accounts
- Certain real estate holdings
- Government-approved investment vehicles
Advance restructuring must be done well ahead of departure, as most countries apply anti-avoidance rules to last-minute asset transfers.
Staggered Residency Exit
Rather than triggering exit tax all at once, individuals can spread their departure over multiple years or manage their status to stay below relevant thresholds.
By planning your exit strategically, e.g., selling certain assets this year and moving next year, you may avoid being hit all at once with a full exit tax bill.
Use of Tax Treaties
Some countries allow deferral or exemption of exit tax when the individual relocates to a country with a tax treaty.
However, treaties differ in scope and strength. Some cover only income tax, while others may address capital gains or include anti-avoidance provisions.
Always consult treaty provisions before making assumptions about relief.
Deferral and Installment Options
Several countries offer deferral of exit tax, particularly for illiquid assets such as private company shares. This allows individuals to delay tax payment until actual sale or realization of the asset.
Deferral usually requires:
- Filing a formal request
- Providing a guarantee or collateral
- Meeting strict deadlines
It’s not an exemption; just a delay. Interest may still accrue, and the tax must eventually be paid or may be triggered by future actions (e.g., asset disposal).
Citizenship and Residency Planning
For American citizens and long-term green card holders, renouncing citizenship or permanent residency may seem like a path to tax freedom. But this can trigger the expatriation tax, which is applied based on asset thresholds and prior compliance.
Strategies to manage this include:
- Reducing net worth below the covered expatriate thresholds
- Limiting average annual tax liability
- Ensuring all prior tax filings are fully compliant
For non-Americans, acquiring a second citizenship before expatriation or relocating to a low-tax jurisdiction with no exit tax (e.g., UAE, Singapore) can provide a longer-term hedge.
Accurate Valuation and Documentation
Because exit taxes are based on unrealized gains, the valuation as of the exit date determines your liability. In many cases, taxpayers overpay due to poor valuation practices or lack of substantiation.
Best practices:
- Obtain independent professional valuations for private companies, crypto, real estate, or collectibles
- Keep records of original acquisition costs and any improvements or adjustments
- Document exchange rates, especially for foreign-currency assets
Countries may challenge aggressive or unsupported valuations, so credible documentation is essential to defending your position.
Exit tax planning should begin months or even years in advance of a move. The optimal approach combines timing, restructuring, treaty analysis, and professional documentation.
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Adam è un autore riconosciuto a livello internazionale in materia finanziaria con oltre 830 milioni di visualizzazioni di risposte su Quora, un libro molto venduto su Amazon e un contributo su Forbes.
