Does Leaving France for Israel Trigger an Exit Tax on My Portfolio?
Yes, if your holdings are large enough. The day you transfer your tax residence out of France, Article 167 bis of the French tax code (CGI) charges an exit tax on the unrealised gains in your share portfolio1. It bites only if you were French tax-resident for 6 of the previous 10 years and your securities are worth at least €800,000, or represent at least 50% of a company's profits13. Because Israel sits outside the EU/EEA, you do not pay on the spot, but you must actively claim a payment suspension and back it with a guarantee.
Not advice
Almost every French oleh making aliyah with a meaningful brokerage account is blindsided by this. In most countries you simply pack up and your latent gains travel with you, untaxed until you actually sell. France is different: it treats your departure itselfas a taxable event on gains you have never realised. The relief is that for a non-EEA destination like Israel the bill is not paid up front—it is suspended—and if you hold your shares for long enough afterward without selling, the whole charge is cancelled. The catch is that the suspension is not automatic the way it is for someone moving to Berlin or Madrid; you have to set it up correctly before you leave.
What Exactly Does Article 167 bis Tax?
It taxes the latent (unrealised) capital gains on your corporate rights, shares, securities and similar holdings, valued at the date you transfer your tax residence abroad1. Two further categories are caught alongside them: receivables from an earn-out clause (clause de complément de prix) on a past sale, and capital gains on securities whose tax was already being deferred from an earlier reinvestment1. In plain terms, France draws a line under your share portfolio on departure day, calculates the paper profit as if you had sold everything, and assesses tax on that figure—even though no sale has happened.
The charge runs to both French income tax and social contributions1. The income-tax layer is the flat 12.8% rate (the prélèvement forfaitaire unique) that the law uses as the basis for the guarantee deposit3, and French social contributions apply on top, so the all-in latent-gain charge is materially higher than 12.8% alone. The exact combined figure depends on your profile and the year's rates, which is one reason to model it with a French adviser rather than assume a single headline percentage.
Who Actually Falls Within the Net?
You fall within the net only if you clear both gates: the residency gate and the size gate. The residency gate is being French tax-resident for at least 6 of the 10 years before you leave3; most long-term residents who lived and worked in France as adults clear it. The size gate is the €800,000-or-50% test1. If your portfolio is below €800,000 and you do not hold 50% of any company's profits, the exit tax does not apply to you at all, however many years you spent in France.
| Condition | Threshold | What it means for an oleh |
|---|---|---|
| Past French residency | 6 of the last 10 years3 | Short-stay residents leaving early may not be caught at all |
| Portfolio value | €800,000+ in securities1 | Measured at the departure date, across all holdings |
| Or, substantial holding | 50%+ of a company's profits1 | Founders and majority owners can be caught below €800,000 |
How Do You Report It, and What Is Form 2074-ETD?
You declare the exit tax on form 2074-ETD at the time of the transfer, listing the unrealised gains, any earn-out receivables and any previously deferred gains1. Then, for every later year that the payment stays suspended, you file form 2074-ETS to confirm you still hold the securities and report any change2. The 2074-ETD is the cornerstone document: it is where the gain is fixed and where, for a non-EEA destination, you also propose the guarantee and request the suspension. Skipping or botching it is how the charge becomes immediately payable instead of deferred.
Can Israel Defer the Tax, or Is It Due on Departure?
It can be deferred, but not on the automatic track the EU/EEA gets. France grants the payment suspension (sursis de paiement) automatically, with no guarantee and no fiscal representative, only when you move to an EU/EEA state, or to a non-EEA state that has signed France a convention covering both administrative assistance against fraud and mutual recovery of tax debts4. For any other non-EEA destination, the suspension is on request: you must expressly opt in, appoint a French fiscal representative, and post a guarantee sufficient to secure the tax4. The request must be filed no later than 90 days before the transfer1.
Whether Israel lands on the automatic track or the on-request track depends on whether the relevant France–Israel treaties meet that double test (administrative assistance and recovery assistance equivalent to the EU standard). That classification is fact-specific and is exactly the kind of point a French fiscal adviser confirms against the current official list before you book your flight. The practical, conservative planning assumption for an oleh is the on-request route: opt in at least 90 days out, line up a French representative, and prepare a guarantee. The guarantee is computed off the declared gains; the law fixes the income-tax component at the 12.8% flat rate3.
A guarantee is not the tax
When Is the Exit Tax Wiped If You Do Not Sell?
The suspended tax is definitively relieved (dégrèvement) once you have held the same securities abroad, without selling, for a set period2. That period is 2 years for most people, and 5 years if your holdings were worth more than €2,570,000 at departure23. Cross that line still holding the shares and the bill disappears; sell, redeem or liquidate inside the window and the suspended tax falls due on the disposed portion. Relief can also come early on death or a qualifying gift, or if you simply return to French residency3.
| Your holdings at departure | Hold-without-selling period for full relief | Aliyah-anchored timing |
|---|---|---|
| Up to €2,570,0002 | 2 years2 | Relief around your 2nd aliyah anniversary if you have not sold |
| Above €2,570,0003 | 5 years3 | Relief around your 5th aliyah anniversary if you have not sold |
For an oleh this reframes the decision. The exit tax is rarely a reason not to make aliyah; it is a reason to plan your sellingschedule. If you can avoid disposing of your French securities for the 2 or 5 years after you land, the suspended charge is wiped entirely—you will have moved your wealth to Israel and paid France nothing on the latent gain.
How Does France's Exit Tax Sit Against the Israeli Side?
Keep the two sides separate, because they pull in opposite directions. France imposes the exit charge on departure as described above. Israelimposes no equivalent arrival or exit tax, and as a new oleh you receive a 10-year exemption on foreign-source income and gains—so a French portfolio you bring with you is, on the Israeli side, sheltered for a decade5. From 1 January 2026 that Israeli exemption became report-but-still-exempt: the income stays untaxed in Israel, but new olim must now declare it5. So the live exposure for a French oleh is overwhelmingly the French exit tax, not anything on the Israeli ledger.
One scope note for dual citizens. This article is about the departure chargeon your gains—a one-off event triggered by moving. It is not about how a fund you keep holding is taxed year to year. US-citizen olim have a separate, ongoing problem there: a non-US pooled fund (a French מטבע חוץ (matbea chutz) OPCVM, SICAV or assurance-vie fund) is a PFIC for US tax, dragging in Form 8621 and the punitive §1291 regime. That is a holding issue, distinct from France's exit charge; if you carry a US passport, treat it as its own workstream.
Quick check
A French oleh leaves with a €1.2M share portfolio and posts the guarantee. How long must they hold those shares in Israel without selling for the suspended exit tax to be wiped?
When you transfer your tax residence out of France to make aliyah, Article 167 bis CGI charges an exit tax on the unrealised gains in your share portfolio. It applies only if you were French tax-resident for 6 of the prior 10 years and your securities are worth at least 800,000 euros, or represent at least 50% of a company's profits. The charge covers both French income tax (a 12.8% flat rate used for the guarantee deposit) and social contributions on top. Because Israel sits outside the EU/EEA, the payment is not automatically suspended: you must opt in at least 90 days before departure, appoint a French fiscal representative and post a guarantee securing the tax. You report the gains on form 2074-ETD when you leave, then file form 2074-ETS each later year while the bill is suspended. The suspended tax is wiped for good once you hold the same securities abroad without selling for 2 years, or 5 years if your holdings exceeded 2,570,000 euros at departure. Israel levies no matching arrival tax and gives new olim a 10-year exemption on foreign-source income (report-but-still-exempt from 1 January 2026), so the live exposure is entirely the French side.
No. The exit tax under Article 167 bis applies only if your securities are worth at least 800,000 euros at departure, or you hold at least 50% of a company's profits. A 500,000 euro portfolio with no 50% company stake is below both thresholds, so the departure charge does not apply, regardless of how long you lived in France. You should still confirm the valuation date with an adviser if you are near the line.
Not if you set up the suspension. For a non-EEA destination like Israel the payment is suspended on request, provided you opt in at least 90 days before departure, appoint a French fiscal representative and post a guarantee. Done correctly, you pay nothing up front; the bill is deferred and can be cancelled entirely if you hold your shares long enough.
Hold the same securities abroad without selling for 2 years, and the suspended exit tax is definitively relieved; the period is 5 years if your holdings exceeded 2,570,000 euros at departure. Selling, redeeming or liquidating inside that window brings the tax on the disposed shares back into charge. Relief can also arrive early on death, a qualifying gift, or a return to French residency.
Form 2074-ETD is the declaration you file at the time you transfer your residence, reporting the unrealised gains, earn-out receivables and previously deferred gains caught by the exit tax. For each later year that the payment is suspended, you file form 2074-ETS to confirm you still hold the securities. Missing these filings can collapse the suspension and make the tax immediately payable.
Israel does not levy a matching exit or arrival tax, and a new oleh gets a 10-year exemption on foreign-source income and gains, so the French portfolio is sheltered on the Israeli side for a decade. From 1 January 2026 that exemption is report-but-still-exempt: untaxed, but now declarable. The realistic double-tax risk is small; the live charge is the French departure tax, which you manage through the suspension.
The French exit tax works the same way regardless of your other passports. But as a US citizen you also face an ongoing PFIC problem on any non-US pooled fund you keep holding (Form 8621, section 1291), which is a separate issue from France's one-off departure charge. Treat the US compliance angle as its own workstream alongside the French exit-tax planning.
Selling before departure realises the gain while you are still French-resident, so you pay normal French capital-gains tax then and there. You have not avoided tax, you have accelerated it. The exit-tax suspension exists precisely so you do not have to liquidate: hold through the 2-year or 5-year window and the latent-gain charge is cancelled. Compare both routes with an adviser before acting.
