Definitions of the principal terms of the regime: article 167 bis CGI, automatic and elective deferral, relief, filing forms, NCSTs, QFZP, the France-UAE treaty, and related concepts.
Provision of the French General Tax Code that establishes the exit tax. It codifies the mechanism for taxing unrealized capital gains upon the transfer of tax residence outside of France, the deferral regime, and the conditions for relief.
Provision setting out the French domestic criteria for tax residence: home or principal place of stay, non-ancillary professional activity, and center of economic interests. Since the 2025 Finance Act, it expressly incorporates the treaty override safeguard.
Mechanism of mandatory tax deferral for the gain realised on the contribution of securities to a holding company controlled by the contributor. If the holding company sells the contributed securities within three years of the contribution, the deferral is maintained only if at least 60% of the sale proceeds are reinvested in an economic activity within two years (Article 150-0 B ter of the CGI). The transfer of tax residence out of France terminates the deferral and brings the gain within the exit-tax base.
UAE decision setting out the criteria for UAE tax residence as of March 1, 2023. Three alternative criteria: 183 days, 90 days with qualifying ties, or a permanent home or center of economic interests.
Criterion under article 4 B 1° c. CGI: the place where the taxpayer has made their principal investments, where they maintain the seat of their business, or from which they administer their assets.
Bilateral treaty in force since July 1, 1990 (Decree no. 90-631 of 13 July 1990). It covers personal income tax, corporate income tax, inheritance tax and, since the protocol of December 6, 1993, the wealth tax. It contains no mutual-assistance clause for the recovery of tax claims, which excludes the automatic deferral under paragraph IV of Article 167 bis of the CGI.
Federal tax on company profits established by Federal Decree-Law No. 47 of 2022. Standard rate of 9% above 375,000 AED of taxable profit, applicable from June 1, 2023.
Implementing decree specifying the procedures for deferral under article 167 bis V CGI: 90-day deadline for proposing guarantees and procedures for designating the fiscal representative.
Extinguishment of the exit-tax claim without payment (Article 167 bis, VII of the CGI). Available after 2 years (portfolio of €2.57M or less) or 5 years (above €2.57M) of holding the securities for departures since 2019, or upon an early return to France, a gift or death.
Triggering event that ends the deferral and renders the tax immediately due and payable: sale for consideration, redemption, repayment or cancellation of the securities; gift by a donor domiciled in a non-cooperative State or a non-treaty third State, absent proof of a not-principally-tax-driven purpose; reporting failure not regularised within 30 days of a formal notice (Article 41 tervicies E of Annex III to the CGI).
Mechanism under OECD Pillar Two transposed in the UAE as of January 1, 2025. It brings the effective tax rate to 15% for multinational groups with consolidated revenues above €750M.
Non-Cooperative State or Territory (ETNC) within the meaning of article 238-0 A of the CGI. The list is set by ministerial order; the UAE does not appear on the list.
Clause in a sale agreement providing for a price supplement conditioned on the achievement of certain post-sale results. Earn-out claims signed before departure fall within the exit-tax base.
UAE federal law establishing the UAE Corporate Tax.
Natural or legal person established in France, designated by the expatriated taxpayer to represent them before the French tax administration for the duration of the deferral. Required under Section V.
Filings specific to the exit tax, to be submitted in paper format only: 2074-ETD for the initial return; 2074-ETS1 (transfers 2011-2012), ETS2 (2013) and ETS3 (since 2014) for follow-up; 2074-ETSL for simplified follow-up (full deferral with no event during the year). Since 2019, annual filing is waived where the deferral covers only unrealised gains.
UAE free zone offering a specific legal and tax framework. Principal free zones: DMCC, DAFZA, JAFZA, IFZA, RAKEZ, ADGM, and DIFC.
French real estate wealth tax (impôt sur la fortune immobilière), in force since 2018 as a replacement for the ISF (wealth tax). It applies only to net real estate assets above €1.3M.
UAE decision specifying the qualifying activities for the QFZP regime.
OECD international framework establishing a global minimum tax of 15% on the profits of large multinational groups. Transposed in the UAE through the DMTT.
Single flat-rate withholding (Prélèvement Forfaitaire Unique). Default regime for the taxation of capital gains on securities and investment income: 12.8% income tax + 18.6% social contributions in 2026 = 31.4% in the aggregate.
The difference between the fair market value of a security on the date of transfer and its acquisition price. This is the principal component of the exit-tax base.
A capital gain previously realized but not immediately taxed, under a deferral mechanism (in particular article 150-0 B ter CGI). It is included in the exit-tax base.
CSG, CRDS and solidarity levy. Aggregate rate of 18.6% (French Social Security Financing Act for 2026, Law no. 2025-1403 of 30 December 2025, art. 12), up from 17.2% previously (and 15.5% before 2017). For the exit tax, the applicable rate is the one in force at the date of the transfer of tax residence.
UAE tax regime that allows entities located in a free zone to benefit from a 0% rate on their qualifying income, subject to compliance with substance requirements, qualifying activities, and the de minimis rule.
See Fiscal Representative.
Value threshold for securities above which the taxpayer falls within the scope of the exit tax (as an alternative to the 50% ownership interest).
Threshold above which the holding period required to obtain relief increases from 2 to 5 years.
Deferral granted as of right for transfers to an EU Member State or another State that has concluded with France the required assistance conventions (fraud/evasion and recovery), excluding NCSTs (Article 167 bis, IV of the CGI). No guarantees or fiscal representative are required.
Deferral granted upon the taxpayer's request for transfers outside the scope of Section IV. Subject to cumulative conditions: proposal of guarantees 90 days before departure, designation of a fiscal representative, and compliance with reporting obligations.
Condition for applying the exit tax: having been a French tax resident for at least 6 of the 10 years preceding the transfer.
Clause in the bilateral treaty (article 4 § 2 of the OECD Model) used to resolve a dual-residence conflict. Four successive criteria: permanent home, center of vital interests, habitual abode, and nationality.
UAE tax residency certificate issued by the Federal Tax Authority. A useful piece of evidence, but not automatically binding on the French tax administration.
Mechanism under article 4 B CGI (2025 Finance Act) according to which a taxpayer who meets the French domestic criteria may be treated as a non-resident if a bilateral treaty assigns residence to the other State.
A one-hour videoconference to review your situation, calibrate your exit tax exposure, and secure your transfer to Dubai. Fee: 2,000 AED (approx. €470).
Book an auditReferences current as at the date of last revision, cited for information only. Any application to a particular situation requires an individualised analysis.
Legislation
Administrative doctrine (BOFiP)
Case law