Exit Tax 2026: Understanding European Exit Taxes and Planning Ahead [DRAFT]

What is an exit tax?

An exit tax (in German "Wegzugssteuer" or "Wegzugsbesteuerung") is a tax that a state levies when a taxable person moves their tax residence abroad. Unlike the ordinary taxation of a capital gain, no actual sale is required: what is taxed is the gain that has accrued up to the point of departure but has not yet been realised (so-called hidden reserves), often on significant company shareholdings. The state treats the departure as though the person had sold their shares at the moment of leaving.

The background is an understandable fiscal concern: a state wishes to tax gains that arose during residence in its territory before the right to tax passes to another state through the change of residence. Within the EU, such rules are framed by the case law of the Court of Justice of the European Union and by the EU Anti-Tax Avoidance Directive (ATAD).

The German exit tax under §6 AStG

In Germany, exit taxation is governed by the Foreign Tax Act (Aussensteuergesetz), specifically §6 AStG. It typically applies to natural persons who have been subject to unlimited tax liability for an extended period and hold a significant shareholding in a corporation when they move their residence abroad.

When is a shareholding deemed significant?

Where such a shareholding exists, the deemed capital gain may be subject to taxation even though no sale has taken place.

Conditions and minimum residence

The application of the German exit tax requires, among other things, that the person was subject to unlimited tax liability in Germany for a certain minimum period before departure. The reform of the Foreign Tax Act changed the earlier deferral and return mechanisms; since then, partly different rules apply to interest-free deferral than before the reform.

Deferral, instalments and return

The law provides mechanisms that can mitigate the immediate liquidity burden, for example spreading the tax over several annual instalments under certain conditions. A so-called return provision may also apply: if the person returns to Germany within a certain period, the assessed tax may under certain circumstances lapse. The exact conditions are complex and should always be reviewed individually.

Exit taxes in other European countries

Germany is not an isolated case. Several European states have their own forms of exit taxation, which differ considerably in thresholds, the types of assets affected and deferral options. The following overview serves as initial orientation and does not replace a country-specific review.

France

France levies an "exit tax" on latent gains in significant shareholdings when a person moves their tax residence out of France. Here too, deferral and relief mechanisms exist, the application of which may depend on the duration of residence and on the destination country.

Austria

Austria likewise has an exit tax on capital assets, often combined with the option of paying the tax in instalments if the move is to an EU or EEA state. The design has been adjusted several times in recent years.

Netherlands

When holders of significant shareholdings leave, the Netherlands works with a so-called protective assessment ("conserverende aanslag"): the tax is assessed but, under certain conditions, initially not collected. In addition, further wealth-related tax questions are being discussed in the Netherlands; such reform debates should be considered independently and not understood as a reason for hasty steps.

Double taxation agreements and the relationship with Switzerland

Whether and to what extent an exit tax actually falls due often also depends on the relevant double taxation agreement between the state of departure and the state of arrival. Such agreements govern which state holds the right to tax and may contain mechanisms for avoiding double taxation. Particularly on departure from Germany to Switzerland, special rules exist that require careful case-by-case review. International guidelines from the OECD on the taxation of cross-border situations form an important framework here.

Plan ahead and stay compliant, do not act in haste

The most important insight is this: exit taxes can be planned for. Anyone who prepares a change of residence over the long term and with expert support can understand the legal framework, meet deadlines and align their structure compliantly, long before a move is even on the horizon. Mirabello Consultancy sees its role here as that of a calm, discreet companion with Swiss precision: we coordinate, put matters in context and work closely with our clients' qualified tax and legal advisers.

An orderly change of residence typically involves more than tax questions alone. Residence and citizenship programmes, such as investment-based residence programmes, are a frequent building block of international mobility. Knowing the options allows the right solution for the family to be chosen early. Our compilations of the best Golden Visa and residence programmes and the leading citizenship-by-investment programmes provide an overview.

Internationally established residence solutions include, for example, the Greek Golden Visa programme, the Portuguese Golden Residence Permit and the Golden Visa of the United Arab Emirates. Which solution makes sense in an individual case depends on personal objectives, the family situation and, not least, the tax framework of the country of departure and the country of arrival.

Principles of sound planning

• Start early: minimum residence periods, deferral and return deadlines operate over years; the earlier planning begins, the more room for structuring exists.
• Review with experts: every structure should be individually reviewed by qualified tax and legal advisers in the country of departure and the country of arrival.
• Act compliantly: the aim is always full compliance with applicable law and transparent reporting obligations, never their circumvention.
• Consider the whole picture: tax, residence law, family and succession belong in one coherent plan.

An important note: this article serves general information purposes only and constitutes neither tax nor legal advice. All thresholds, deadlines and provisions mentioned may change and must be verified in the individual case by qualified professionals. The official sources are always authoritative, such as the publications of the German Federal Ministry of Finance.

Frequently asked questions (FAQ)

What does exit tax 2026 mean in concrete terms?

The exit tax taxes unrealised gains, above all on significant company shareholdings, when tax residence is moved abroad. No actual sale takes place; the departure itself triggers the taxation.

Does the exit tax apply to everyone who emigrates?

No. In Germany it typically applies only to persons with a significant shareholding in a corporation who were previously subject to unlimited tax liability for a certain minimum period. Whether someone is actually affected must always be reviewed individually.

Can the tax be deferred or paid in instalments?

Many countries have deferral or instalment mechanisms whose conditions and deadlines differ. A return within certain periods can, in individual cases, cause the burden to lapse.

Can the exit tax be legally avoided?

Serious planning does not aim at circumvention, but at understanding and compliant structuring. Early planning, correct structuring and the use of statutory deferral and return provisions can mitigate the burden within the framework of applicable law, always transparently and in accordance with the law.

What role does Mirabello Consultancy play in this?

Mirabello Consultancy coordinates the residence and mobility side of an orderly change of residence and works closely with clients' qualified tax and legal advisers. We do not provide tax advice, but calm, discreet end-to-end support with Swiss precision.

Would you like to find out what a legally secure change of residence could look like for you? Arrange your free initial consultation with Mirabello Consultancy now: discreet, precise and tailored to your situation.