German Exit Tax 2026: How to Avoid It

Key points at a glance: Exit tax under Section 6 AStG taxes a deemed capital gain on shares and fund units, at around 26.375%, when a person permanently leaves Germany. It can legally be avoided or deferred: moving to an EU/EEA country, and under BMF practice also to Switzerland, gives an unlimited, interest-free deferral until the shares are actually sold. Taking up residence in an EU country is possible for German nationals without an investment visa, thanks to EU freedom of movement; a second citizenship complements the structure as passport diversification. Mirabello Consultancy, based in Zurich, supports this process end to end. Book your free consultation →

What is exit tax, and who is affected in 2026?

Short answer: Exit tax under Section 6 of the Foreign Tax Act applies when a natural person who was fully liable to tax in Germany for at least 7 of the last 12 years moves their residence abroad while holding capital shares with unrealised gains. The tax office treats the departure as a deemed sale at market value, so the accrued gain becomes immediately taxable even though no actual sale has taken place.

The Foreign Tax Act has existed since 1972 and was originally intended to stop hidden reserves in German corporate shareholdings escaping German taxation through emigration. For a long time, Section 6 AStG covered only shares in corporations under Section 17 of the Income Tax Act, meaning shareholdings of at least 1% in a GmbH or AG.

The 2024 Annual Tax Act, in force since 1 January 2025, massively widened its scope: since then, units in investment funds and ETFs under the Investment Tax Act (InvStG) are also subject to exit tax. This means millions of German private investors are affected for the first time, many without realising it. You can find the legal basis at Section 6 AStG on gesetze-im-internet.de.

You are affected in 2026 if all of the following apply: you were fully liable to tax in Germany for at least 7 of the last 12 years, you are moving your residence or habitual abode abroad, and at the time of departure you hold shares with unrealised gains (GmbH/AG shareholdings of 1% or more, or fund and ETF units).

Mirabello Consultancy is based in Zurich and Dubai, is an IMC member and ACAMS certified, and has guided over 350 Golden Visa cases with a 99% success rate. If you are planning your move, an early assessment pays off; a free initial consultation will clarify whether you are personally affected.

How much is exit tax and how is it calculated?

Short answer: The tax office compares the market value of the shares on the day of departure with their tax cost basis. The difference, the deemed capital gain, is subject to the 25% capital gains tax plus solidarity surcharge on fund and equity holdings, an effective rate of around 26.375%. For equity funds, a 30% partial exemption reduces the taxable base, bringing the effective rate down to about 18.46%.

A simplified example illustrates the scale involved. An investor from Munich holds an ETF portfolio with a market value of EUR 2,000,000 against a cost basis of EUR 800,000.

Item	Amount
Market value of ETFs on the day of departure	EUR 2,000,000
Tax cost basis	EUR 800,000
Deemed capital gain	EUR 1,200,000
Taxable base after 30% partial exemption	EUR 840,000
Tax at around 26.375% (due immediately without deferral)	approx. EUR 221,550

Without planning, around EUR 221,550 would be due to the tax office immediately, for a gain that exists only on paper. Depending on the individual case, prior-year advance lump-sum taxes and a possible church-tax liability may also apply. An individual tax calculation is therefore essential.

Important in practice: since 1 January 2026, electronic notification of the exit-tax event through the Federal Ministry of Finance's portal is mandatory. Anyone emigrating with affected shares must report the move electronically. Official information is available from the German Federal Ministry of Finance. We have covered the details specifically for ETF investors in a dedicated guide: Exit tax on ETFs 2026 →

Which destination countries trigger an immediate tax payment?

Short answer: Moving to an EU/EEA country gives an automatic, unlimited, interest-free deferral of exit tax; it only becomes due when the shares are actually sold. Moving to a typical third country (for example the USA, the UAE or the Caribbean) generally makes the tax due immediately; instalments over seven years are only possible against security. Switzerland is the decisive special case.

The destination country is the single most important lever in the whole plan. Three categories need to be distinguished.

1. EU/EEA states, the unlimited deferral. Anyone moving to Portugal, Greece, Malta, Cyprus, Austria, Ireland or another EU/EEA state benefits from an automatic, indefinite, interest-free deferral. This rule goes back to the European Court of Justice ruling in de Lasteyrie du Saillant (case C-9/02) and reflects the European freedom of establishment. The tax liability arises in principle, but is only collected once the shares are genuinely sold.

2. Typical third countries, immediate liability. Moving to the USA, the United Arab Emirates or the Caribbean generally makes exit tax due immediately. Since 2026, the previous indefinite deferrals for such moves have been abolished; only an instalment plan over seven years remains possible, usually against security such as a bank guarantee.

3. Switzerland, the special case. Switzerland is not an EU/EEA state, but under BMF administrative practice and the double tax treaty it is treated more favourably on this point than any other third country. More on that in the next section.

How does the unlimited deferral work when moving to Switzerland?

Short answer: Under current BMF administrative practice and the Germany-Switzerland double tax treaty, exit tax is deferred without limit and interest-free when moving to Switzerland, comparable to the EU/EEA standard and unique among third countries. The tax only becomes due once the shares are actually sold. This treatment is a key reason why Switzerland is particularly attractive, tax-wise, for wealthy Germans.

For wealthy Germans who want to hold their shares long term, Switzerland is therefore one of the most interesting options available: it combines the unlimited deferral of exit tax with the Swiss lump-sum taxation regime (Pauschalbesteuerung), which allows non-working new residents to be taxed on a flat basis. The federal minimum base stands at around CHF 435,000 in 2026.

One important planning point concerns how the two instruments interact: anyone who opts for lump-sum taxation in Switzerland may, under the double tax treaty, no longer be treated as resident in Switzerland. This can extend Germany's expanded limited tax liability under Section 2 AStG from five to ten years. A common approach is to choose ordinary Swiss taxation first and switch to lump-sum taxation only once that period has passed. This decision should always be coordinated individually with tax advisers in both countries.

Mirabello Consultancy is based in Zurich and knows the realities of the Swiss tax system first-hand. We describe the full process, including choosing the right canton, in detail here: Moving to Switzerland 2026, the complete tax guide →

Why an EU Golden Visa is usually not relevant for German investors

Short answer: An EU Golden Visa is designed for nationals of non-EU/EEA countries who must purchase their EU residence right through investment. German nationals already hold that right through EU freedom of movement: moving to Greece, Portugal or Cyprus is enough on its own to become tax resident there and activate the automatic, interest-free deferral of German exit tax, with no investment visa required.

A German national relocating their tax base to another EU/EEA country does not need to raise an investment sum to do so: freedom of movement allows residence to be taken up without an approval process. Applied in the right order, first residence in the destination country, then the tax departure from Germany, this creates the ideal starting point to use the full deferral rule.

Greece. As an EU country, taking up residence in Greece activates the deferral; incoming high-net-worth individuals with foreign income can also access a flat-tax regime (around EUR 100,000 per year). There is no minimum stay requirement. More on Greece →

Portugal. As an EU member, Portugal remains a strong candidate for the deferral; the president elected in 2026 is considered programme-friendly. More on Portugal →

Malta Permanent Residency. Malta offers one of the most tax-favourable frameworks in the EU: under Non-Dom status, foreign income not remitted to Malta remains, in effect, untaxed, subject to a minimum tax of around EUR 15,000 per year. As an EU member, Malta activates the full deferral. More on residency in Malta →

Cyprus. EU and Schengen access, no minimum stay requirement. Its Non-Dom status (up to 17 years, no tax on securities gains) was further enhanced in 2026 through a liberalised 60-day tax residency rule.

German nationals who instead want a residence outside the EU will find a tax-free alternative in the UAE Golden Visa. A full comparison of all residence programmes is available on our overview: Best Golden Visa programmes 2026 →

How does a second citizenship help with exit-tax planning?

Short answer: A second citizenship through Citizenship by Investment (CBI) serves passport diversification, freedom of travel and long-term wealth protection. It is not decisive for exit tax itself; what matters is the country of tax residence, not citizenship. The most effective structure therefore combines an EU residence, for the deferral, with a CBI citizenship, for optionality.

Since Germany liberalised its rules on multiple citizenship in June 2024, German nationals can acquire a second citizenship without giving up their German passport. This removes the single biggest historical obstacle to CBI programmes in the German-speaking world.

A second citizenship creates freedom of travel independent of geopolitical developments, a legal structure for international assets, and indefinite planning certainty that can be passed on to children. Caribbean programmes such as Dominica (from $200,000), Antigua ($230,000) or Grenada ($235,000) sit outside the EU/EEA, so for the deferral a parallel EU residence remains decisive.

We set out the concrete options for German citizens in 2026 here: Second passport for Germans 2026 →. Our overview covers all current programmes: Best citizenship by investment programmes 2026 →. For clients with US ties, the UAE Golden Visa is also worth considering as a tax-free residence.

Which mistakes should you avoid in exit-tax planning in 2026?

Short answer: The most common mistakes are planning too late, choosing the wrong destination country, ignoring the mandatory exit-tax notification, and relying on promised reforms. Anyone wanting to legally avoid exit tax should start 12-24 months in advance, choose the destination country based on the deferral effect, and plan the structure under the rules that actually apply today.

Planning too late. Staged realisation of gains within annual allowances and correctly structuring the portfolio both take lead time. 12-24 months is ideal.
The wrong destination country. Moving to a typical third country risks immediate liability. EU/EEA states and Switzerland offer the deferral.
Forgetting the exit-tax notification. Electronic reporting has been mandatory since January 2026; failing to do it can cause problems with the tax office.
Waiting for reform. A mobility reform (higher thresholds, a returnee rule) called for by business associations in spring 2026 remains at the lobbying stage; there is no draft law. Plan under the rules in force today.

Frequently asked questions (FAQ) on exit tax 2026

Can I avoid exit tax entirely?
Complete avoidance is not provided for under Section 6 AStG; the tax liability arises in principle. However, moving to an EU/EEA country or to Switzerland gives an unlimited, interest-free deferral, and the tax only becomes due once the shares are actually sold. With good planning, that point can be pushed well into the future, or substantially eased through a later sale in a tax-favourable country of residence.

Does exit tax also apply to ETF savings plans?
Yes. All units accumulated through a savings plan are subject to taxation on departure, regardless of whether they were acquired through a savings plan or as a lump-sum investment. Each instalment has its own cost basis; the total gain is the sum across all positions.

What happens if I return to Germany within seven years?
If you return within the statutory period and have not sold the shares in the meantime, the assessed exit tax can, on application, be reversed. This requires that there was no intention to avoid tax and that the matter was correctly reported to the tax office.

Does Swiss lump-sum taxation automatically solve the exit-tax problem?
No. Deferring exit tax on a move to Switzerland and Swiss lump-sum taxation are two separate instruments. Lump-sum taxation is very attractive long term, but under the double tax treaty it can extend Germany's expanded limited tax liability under Section 2 AStG from five to ten years. Both aspects should be planned together.

How do I start emigration planning with Mirabello Consultancy?
The first step is a free initial conversation with our specialists. We analyse your situation, portfolio value and composition, intended destination, time horizon and family circumstances, and develop a tailored strategy, including a recommendation for the optimal residence or citizenship programme and coordination with tax advisers in the destination country. Mirabello Consultancy is based in Zurich and Dubai and guides DACH clients with a 99% success rate. Book your free consultation →

Avoiding German Exit Tax 2026: The Complete Guide for German HNWIs