It is the question that worries business owners and investors preparing their relocation to Andorra from France the most: “will I have to pay the exit tax?”. The honest answer: only certain estates are affected, and in most cases the tax is suspended and later cancelled — provided a precise set of formalities is respected, all the more important since Andorra is not a member of the European Union. Here is the complete picture, updated for 2026.
Who is affected? Three cumulative conditions
The French exit tax (article 167 bis of the French tax code) does not concern every expatriate. It applies if, on the date of departure, you meet all three conditions:
- You have been a French tax resident for at least 6 of the 10 years preceding the transfer of your residence;
- You hold securities (shares, company stakes, bonds…) with a total value above €800,000, or a stake of at least 50% in a company’s profits;
- You actually transfer your tax residence outside France.
Below these thresholds, no exit tax — your move to Andorra can be organised without this constraint. Worth noting: directly held real estate and life-insurance policies are outside the scope of the exit tax (they follow other rules).
What is taxed, and at what rate
The exit tax targets the unrealised capital gains existing on the day of departure (the difference between the value of your securities on that date and their acquisition price), as well as earn-out receivables and capital gains under tax deferral. The rate is the French flat tax: 12.8% income tax + 18.6% social levies, i.e. 31.4% in 2026 (with an option for the progressive scale). The tax is computed on wealth that is not realised — which is precisely why the legislator provided for a payment deferral.
Moving to Andorra: the deferral is not automatic
This is the point most candidates overlook. For a move to a European Union member state, the payment deferral is granted automatically, with no formalities and no guarantees. Andorra, however, is not an EU member: the Franco-Andorran tax treaty of 2 April 2013 organises the exchange of information, but contains no assistance-in-recovery clause of the kind required by article 167 bis. The direct consequence:
| Formality | Moving to Andorra | Moving within the EU |
|---|---|---|
| Payment deferral | Upon request | Automatic |
| Filing deadline | 90 days before departure | — |
| Tax representative in France | Mandatory | No |
| Guarantees (bank guarantee, pledge…) | Yes — basis: 12.8% of the gains | None |
| Relief after 2 or 5 years | Yes | Yes |
| Article 167 bis of the French tax code — 2026 rules for a transfer of tax residence from France to Andorra. | ||
In practice, to benefit from the deferral, the request is made on form 2074-ETD, filed within the 90 days preceding the transfer of residence, with the appointment of a tax representative established in France and guarantees offered to the French Treasury (bank guarantee, pledge of securities, mortgage…). A tight schedule that must be prepared — exactly what we orchestrate with your adviser, alongside your Andorran tax residency application.
Pay, then recover: relief after 2 or 5 years
In the vast majority of cases, the exit tax is a temporary tax. If you keep your securities, the tax is cancelled automatically (or refunded if it had been paid):
- after 2 years when the value of the securities concerned is below €2.57M on the day of departure;
- after 5 years above that threshold.
Relief is also granted upon returning to France, upon a gift of the securities, or upon death. Conversely, if you sell during the period, the deferred tax becomes payable — a sale is therefore planned after the period expires, or by carefully deciding what to sell before departure. One imperative in all cases: file the annual follow-up form 2074-ETS every year; missing it can cause the deferral to lapse.
The tax timeline of your departure
Beyond the exit tax, a clean departure follows a precise chronology:
- Before departure: audit of your assets (are you within the scope of the exit tax?), deferral request where relevant (2074-ETD, ≤ 90 days), preparation of the Andorran residency file;
- The year after departure: final French tax return in two parts — worldwide income up to the departure date, then French-source income only (form 2042-NR);
- Afterwards: only your French-source income remains taxable in France under the 2013 treaty — French dividends (12.8% withholding), French rental income (tax + social levies), and the IFI wealth tax if your French real estate exceeds €1.3M net. Your Andorran income falls under Andorran personal income tax, capped at 10% — see our complete guide to Andorran taxation.
One detail that matters if you keep a property in France: on a later sale above €150,000, an accredited tax representative is in principle required for a seller established outside the EU.
The exit tax is not an obstacle — it is a parameter
Properly anticipated, the exit tax blocks no project: it sets a timeline (when to leave, when to sell) and a set of formalities (deferral, guarantees, annual follow-up). The costly mistake is improvisation — leaving without a deferral request, or missing a follow-up filing. Compare what is at stake: 31.4% immediately in France, versus 0 to 10% on your future gains once an Andorran resident (see our Andorra vs France comparison). The gap is well worth three months of preparation.
Key takeaways
- In scope: residents 6 of the last 10 years + securities > €800,000 or a stake ≥ 50%
- Base: unrealised gains on the day of departure — rate 31.4% (2026 flat tax)
- Andorra (outside the EU): deferral upon request — 2074-ETD ≤ 90 days before departure, tax representative + guarantees
- Automatic relief after 2 years (< €2.57M) or 5 years, if the securities are kept
- Mandatory annual follow-up: form 2074-ETS
Every estate calls for its own strategy: sell before departure, request the deferral, or pay and later recover. We model all three scenarios before any decision, together with your tax lawyer, and set the full timeline of your wealth planning.
