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Home / Insights / Article 167 bis CGI — exit tax and a move to the UAE

Fiscal Representative in France: Role and Cost for the Exit Tax

Article 167 bis of the French Tax Code (CGI) establishes a targeted regime for the taxation of unrealized capital gains on certain securities and corporate rights upon the transfer of one's tax domicile out of France. It provides for two distinct payment deferral regimes: an automatic deferral, operating by force of law, under its paragraph IV, where the conditions set out in that paragraph are met (by reference in particular to the bilateral treaties in force and to the list of non-cooperative states and territories within the meaning of article 238-0 A CGI), and an optional deferral under its paragraph V, governed in particular by Decree No. 2019-868 of 21 August 2019, which as a general rule requires the proposed security to be filed no later than 90 days before the transfer. Determining which regime applies to a move to a given country — notably the United Arab Emirates — calls for a case-by-case analysis.

In brief — Article 167 bis CGI

Article 167 bis CGI applies, under the conditions it sets out, to the transfer of one's tax domicile out of France where the taxpayer holds shareholdings reaching the thresholds set by that statute (in particular a holding of at least 50% of a company's profits, or a portfolio of securities worth more than EUR 800,000), and where the prior-residence conditions in France are met. The tax assessed on unrealized capital gains, on claims arising from an earn-out clause, and, where applicable, on deferred capital gains, is computed under the rules in force on the date of the transfer. The payment deferral is structured under paragraphs IV (automatic) and V (optional) of article 167 bis CGI, the applicability of which to a given destination calls for a case-by-case analysis. Filing obligations — in particular the submission of the 2074-ETD return — apply throughout the entire deferral period.

Why a fiscal representative in France?

When a French taxpayer transfers their tax domicile out of France and benefits from the optional deferral under article 167 bis V CGI, they become — by definition — a French tax non-resident. Yet the French tax authorities need a reliable, reachable point of contact on national territory for the purposes of monitoring the deferred tax claim: that is the role of the fiscal representative.

The designation of a fiscal representative is one of the cumulative conditions of the optional deferral, alongside the filing of a proposed security (90 days before the transfer) and compliance with the annual filing obligations. Without a validly designated fiscal representative, the deferral simply cannot be obtained.

Who can be appointed

The statute imposes three conditions on the fiscal representative: being established in France (domicile or professional establishment); being authorised to receive, in the taxpayer's place, the communications relating to the assessment, recovery and litigation of the tax (CGI, art. 167 bis, V-1); and having accepted the engagement, that acceptance being recorded on the 2074-ETD return. The fiscal representative is a mere intermediary between the tax authorities and the taxpayer: in that capacity alone, they cannot be pursued for payment of the taxes owed by the taxpayer (BOI-RPPM-PVBMI-50-10-30, para. 160).

In practice, three categories of fiscal representatives coexist. Specialized French tax attorneys offer the most comprehensive solution, with the protection of professional confidentiality and the ability to provide representation before the administrative courts in the event of subsequent litigation. Fiscal representation firms offer standardized services at a controlled cost, suited to simple cases. More rarely, a close relative may be appointed, but this solution exposes the personal relationship to the vagaries of the procedure and is not recommended for significant estates.

Duties of the fiscal representative

Throughout the deferral period, the fiscal representative handles the receipt and forwarding of correspondence from the French tax authorities to the expatriate taxpayer. They coordinate the annual filing of forms 2074-ETS1, ETS2, ETS3 and ETSL. They notify the tax authorities of any event that may give rise to a partial or total loss of the deferral (disposals, gifts, buybacks, liquidations). They monitor the value of the security where it relates to securities or to real estate whose value may change.

In the event of an audit or litigation, the fiscal representative becomes the tax authorities' principal point of contact. They receive the notices of audit, the proposed reassessments and the formal demands. They coordinate the response to the tax authorities together with the taxpayer and their tax attorney, and forward to the taxpayer and their advisers the elements needed to pursue, within the statutory deadlines, administrative and, where applicable, judicial appeals.

Indicative cost of an engagement

The cost of a fiscal representation engagement depends on the complexity of the case and on the expected duration of the deferral. For a simple case (listed securities, portfolio below EUR 1M), the annual fees range between EUR 1,500 and EUR 3,000. For an intermediate case (listed and unlisted securities, portfolio below EUR 5M), between EUR 3,000 and EUR 6,000. For a complex case (multiple companies, holding structures, portfolio above EUR 5M), between EUR 6,000 and EUR 15,000 per year. One-off engagements (handling a loss-of-deferral event, responding to an audit) are billed on a time-spent basis or by quote.

To estimate the total cost over the duration of the deferral, the annual fees must be multiplied by the expected duration (2 or 5 years depending on the portfolio value on the date of the transfer). For an intermediate case with a portfolio of EUR 3M and a 5-year deferral, the total cost may reach EUR 25,000.

Appointment procedure

For the on-request deferral, the designation of the fiscal representative is made on the 2074-ETD return filed, together with the proposal of guarantees, with the non-residents tax office no later than 90 days before the transfer (CGI, Annex III, art. 41 tervicies A, derived from Decree No. 2019-868 of 21 August 2019). The designation includes the name or company name and the address of the fiscal representative, the indication that they accept the engagement, and the statement that they are authorised to receive the communications relating to the assessment, recovery and litigation of the tax (CGI, art. 167 bis, V-1).

Changing representative during the deferral period

The taxpayer may change fiscal representative during the deferral period: the initial designation continues to produce its effects for as long as no new representative is appointed. The appointment of a new representative is made by plain letter sent to the non-residents tax office (BOI-RPPM-PVBMI-50-10-30, para. 170), taking care to avoid any break in the chain of representation.

When to opt for a tax attorney

For significant estates (above EUR 5M) or for foreseeable litigation (tense positions on valuation, complex interposed structures, cases that have already been subject to a prior audit), the designation of a tax attorney as fiscal representative offers three decisive advantages.

First, continuity with the adviser who prepared the exit tax file: the attorney who structured the deferral knows all the technical and legal parameters, which avoids loss of information and transmission errors.

Second, the protection of professional confidentiality: exchanges with an attorney are protected by a general and permanent professional secrecy (subject to anti-money-laundering obligations), which is not the case with a standard fiscal representation firm.

Third, the ability to provide immediate representation in the event of an audit or litigation: if the tax authorities open an audit, the attorney-representative can immediately carry out their defense duties, without the need to retain a new adviser.

Practical summary

The fiscal representative is not a mere formality: it is a structuring element of the optional deferral arrangement. Selecting the right representative — at the right cost, with the right skills — is an integral part of departure planning. For a project to move to Dubai, the ideal is to identify the fiscal representative between T-9 months and T-6 months, to sign the engagement letter between T-6 months and T-3 months, and to notify the designation in the 2074-ETD return at the time of the initial filing.

Frequently asked questions

Am I required to appoint a fiscal representative in order to move to Dubai?

Yes, as soon as the optional deferral under paragraph V of article 167 bis CGI is sought, which is the case for a move to the UAE. The appointment is one of the cumulative conditions of the deferral. Without a fiscal representative, the deferral cannot be obtained and the exit tax becomes immediately due.

How much does a fiscal representative cost over the duration of the deferral?

For a simple case, expect EUR 1,500 to EUR 3,000 per year; for an intermediate case, EUR 3,000 to EUR 6,000; for a complex case, EUR 6,000 to EUR 15,000. Over 5 years (the relief period applicable to unrealized gains where the portfolio value exceeds EUR 2.57M at the date of transfer, CGI, art. 167 bis, VII), the total cost may reach EUR 25,000 to EUR 75,000.

Can my accountant be appointed as fiscal representative?

Legally yes, but professional confidentiality is more limited than that of an attorney. For substantial estates or foreseeable litigation, a tax attorney is recommended. For simple cases, a specialized fiscal representation firm may be suitable.

Can I change my fiscal representative during the deferral period?

Yes. The appointment of a new representative is made by plain letter sent to the non-residents tax office (BOI-RPPM-PVBMI-50-10-30, para. 170), the initial designation continuing to produce its effects for as long as no new representative is appointed, which avoids any break in the chain of representation.

Sources & case law

Article 167 bis CGI, V-1 (designation of a representative established in France, authorised to receive the communications relating to the assessment, recovery and litigation of the tax); Decree No. 2019-868 of 21 August 2019 (CGI, Annex III, art. 41 tervicies A: filing of Form 2074-ETD and of the proposal of guarantees 90 days before the transfer). Doctrine: BOI-RPPM-PVBMI-50-10-30, para. 160 (the representative, a mere intermediary, is not liable for payment of the tax) and para. 170 (change of representative by plain letter); BOI-RPPM-PVBMI-50-10-50 (follow-up reporting obligations).

Frequently asked questions

Article 167 bis of the French Tax Code (CGI) establishes a targeted regime for the taxation of unrealized capital gains that applies, upon the transfer of one's tax domicile out of France, to certain categories of assets — essentially corporate rights, securities or rights of a similar nature, earn-out claims and, where applicable, deferred capital gains. The regime requires the members of the tax household to hold, directly or indirectly, a holding of at least 50% of the profits of a company subject to corporate income tax, or for the aggregate value of the corporate rights, securities or rights to exceed EUR 800,000. Form 2074-ETD, together with Forms 2042 and 2042 C, is filed in the year following that of the transfer (CGI, Annex III, art. 41 tervicies). The interaction with a move to the United Arab Emirates of the deferral regimes provided under paragraphs IV and V of article 167 bis calls for a specific analysis of the provisions in force on the date of the transfer, paragraph V opening an optional deferral, conditional on an express application and on the provision of security within the procedural framework set out in particular by Decree No. 2019-868 of 21 August 2019.
Yes. Shares or units of a SARL, SAS, SA or of an SCI subject to corporate income tax fall within the scope of the exit tax upon a change of domicile, where the thresholds of article 167 bis, I CGI are met — interests in real-estate-heavy companies covered by article 150 UB CGI being excluded. Even without a sale, the difference between your acquisition price and the market value of the securities at the date of transfer is taxable. Holding structures and chains of shareholdings must be reported in full.
Yes. Article 167 bis CGI provides for an automatic payment deferral (paragraph IV) for moves to an EU or EEA state that has entered into a recovery assistance agreement with France, and for an optional deferral upon application (paragraph V) for other destinations, including the United Arab Emirates. This optional deferral requires security (bank guarantee, mortgage, pledge) and the designation of a fiscal representative accredited in France. The tax remains assessed; actual payment is deferred until the sale, buyback, redemption or cancellation of the securities.
Failure to report exposes you to a reassessment of the tax on unrealized capital gains, together with the standard penalties: late-payment interest at a rate of 0.20% per month (article 1727 III CGI), a 10% surcharge for failure to file (article 1728 1. a) CGI), raised to 40% in the event of a deliberate omission (article 1729 a) CGI) or to 80% in the event of fraudulent practices (article 1729 c) CGI). The statute of limitations for reassessment is three years (article L. 169 LPF), extended to ten years where undeclared foreign accounts are involved.

Manage your exit tax with GEOTAX

The exit tax calls for a careful analysis of the taxable base, the holding thresholds, the payment deferral and the security. GEOTAX reviews your assets, assesses your unrealized capital gains and manages the 2074-ETD return as well as the setup of the deferral for moves to the UAE.

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