Exit Tax When Leaving the EU: What to Expect Before Moving to Russia

This content is for informational purposes only and does not constitute legal, tax, or financial advice. Tax laws change frequently and individual circumstances vary significantly. Consult a qualified cross-border tax advisor and immigration attorney for your specific situation.

Last autumn, a French entrepreneur walked into our Moscow office with a number written on a Post-it note: EUR 1,350,200.

That was his exit tax bill. His accountant in Paris had calculated it the week before — 31.4% of EUR 4.3 million in unrealized capital gains on his company shares and securities portfolio. He had not sold anything. He had not realized a single euro of profit. He simply told the French tax authority he was leaving, and they handed him a bill for 1.35 million euros. Payable immediately, because Russia is not an EU/EEA destination and France does not defer for non-EU moves.

He was furious. He was also 18 months too late.

We got that number down to EUR 399,000 — but only because he had enough runway left for loss harvesting, a legitimate equity restructuring, and strategic partial disposals. If he had come to us a year earlier, the savings would have been larger. If he had come six months later, there would have been nothing we could do.

This is the single largest financial obstacle for HNWI moving from the EU to Russia. The ATAD framework (Directive 2016/1164, Article 5) gives every EU member state the authority to tax your unrealized gains on the way out. Rates run from 19% to 42%. Deferral options exist — but only for moves within the EU/EEA. Move to Russia, and you pay the full amount upfront.

Russia imposes no exit tax on departing residents. No entry tax on arriving ones. No wealth tax. No inheritance tax. That asymmetry is why the planning matters — and why the abolition of Non-Dom regimes across Europe has accelerated HNWI departures into 2026.

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How Exit Tax Works — and Why It Feels Like a Penalty

The mechanism is brutal in its simplicity. The day you leave, the state pretends you sold everything. Every qualifying asset — company shares, securities portfolio, fund participations — gets a "deemed disposal" valuation. The tax authority calculates the paper gain between your acquisition cost and the current market value, and hands you a bill. No actual sale happened. No cash was generated. The liability is real anyway.

ATAD Directive 2016/1164 required all 27 EU member states to implement corporate departure taxation by January 2020. For individuals, implementation is discretionary — which has produced a patchwork of at least 10 distinct regimes (European Commission, 2024). Some countries hit hard. Some do not impose it at all. The difference between departing from France versus Portugal can be seven figures.

Tax authorities justify it as "protecting the tax base" — you built wealth under their system, so you should not get to leave and realize those gains elsewhere. Whether you agree with that rationale or not, the bill arrives regardless. An entrepreneur with a company valued at EUR 10 million and a low cost basis? The liability can exceed EUR 2.5 million.

Three countries do not impose individual departure charges: Portugal, Belgium, and Ireland. Remember those names — they become important when we discuss jurisdictional sequencing below.

For how Russia structures its own tax system on the receiving end, see our Russian tax system guide for foreign investors.

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The Country-by-Country Reality

Not all EU departure levies are created equal. France, Germany, and the Netherlands hit the hardest — and we deal with clients from all three regularly, so let us be specific.

France taxes unrealized gains on securities above EUR 800,000 at 31.4% under the PFU (12.8% income tax + 18.6% social contributions after the 2026 CSG increase). Germany's Wegzugsbesteuerung uses the Teileinkünfteverfahren — 60% of the gain taxed at progressive rates up to 45% plus 5.5% solidarity surcharge, yielding about 28.5% effective maximum. The Netherlands hits substantial shareholdings (5%+) under a two-bracket Box 2 system: 24.5% on the first EUR 68,843, then 31% on everything above.

All three offer deferral for moves within the EU/EEA. None offer deferral for moves to Russia.

Here is the full picture across 12 jurisdictions as of Q2 2026:

The Column That Matters Most

Look at the "Non-EU Treatment" column in the table above. Every single entry that says "deferral" or "installments" restricts those options to intra-EU/EEA moves. Moving to Russia? You pay the maximum. Immediately.

Germany made this worse in 2022. The reform of Section 6 AStG (Bundesgesetzblatt I 2021, p. 2035) eliminated the indefinite deferral that previously existed for non-EU/EEA departures. Gone entirely. Before the reform, a German entrepreneur leaving for Russia could at least defer. Now the Finanzamt wants the full amount on departure.

France never offered deferral for Russia in the first place — Article 167 bis CGI only qualifies EU/EEA destinations and countries with specific tax information exchange agreements. Russia is on neither list.

The Netherlands is an interesting exception — not because it is lenient, but because it has enforcement teeth. The Dutch conserverende aanslag (literally "preserving assessment") is assessed on departure, but the Belastingdienst can pursue collection through the bilateral DTA. And here is the detail most people miss: the Netherlands-Russia DTA is still operational. The Netherlands was not among the 38 countries in Russia's 2023 treaty suspension. So Dutch tax authorities can and do enforce collection against Russia-based former residents.

The bottom line? Move from France, Germany, or the Netherlands directly to Russia and you pay the maximum assessed amount, in full, immediately. That is why advance planning — and sometimes a two-step jurisdictional sequence through Portugal or Ireland — is worth every euro in professional fees. See our Golden Visa tax benefits analysis for how these departure costs interact with Russia's receiving-side tax position.

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Not Everything Gets Taxed — But the Things That Do Are Expensive

Your apartment is safe. Your savings account is safe. Your car collection, art, jewelry — all safe (unless classified as business assets). What gets taxed is the stuff that matters most to entrepreneurs: company shares, securities portfolios, fund participations, and increasingly, cryptocurrency.

Always subject (in countries with this levy):

• Company shares with qualifying stake — 1% in Germany (Section 6 AStG), 5% in the Netherlands (Box 2), any amount above EUR 800K in France (Article 167 bis CGI)
• Listed securities portfolios exceeding country-specific value thresholds
• Private equity participations and fund interests
• Business assets of sole proprietorships and partnerships

Sometimes subject (country-dependent):

• Real estate other than primary residence — Denmark includes investment property; most others exclude
• Pension assets — Denmark imposes a specific pension departure levy; most EU countries do not
• Life insurance policies with investment component — Austria and Denmark
• Cryptocurrency — France included crypto assets in its departure tax base in 2024; Germany taxes crypto gains if held under 1 year; the Netherlands includes digital assets in Box 3 wealth calculations

Typically excluded:

• Primary residence (uniformly excluded across all EU departure tax regimes)
• Bank deposits and savings accounts
• Personal property — vehicles, art, jewelry (unless classified as business assets)

"The most common and highest-value trigger for HNWI is entrepreneurial equity," notes a cross-border tax specialist at a Big Four advisory firm. "A founder holding 100% of a company valued at EUR 20 million with a EUR 500,000 cost basis faces taxation on EUR 19.5 million of unrealized gain — a liability that can exceed EUR 5 million depending on the departure country."

For those considering how Russian tax law treats these same asset categories post-arrival, our guide to tax planning for foreign residents in Russia covers the specifics.

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The Timing Trap — 183 Days, Dual Residency, and Suspended DTAs

This is where people get hurt. Not by the rates — those are knowable — but by the timing.

The trigger mechanism varies — and getting the date wrong can cost you the deferral entirely.

Germany and Austria trigger on official deregistration (Abmeldung). Walk into the Einwohnermeldeamt, sign the form, and the Finanzamt gets notified automatically. The Netherlands? It is messier — cessation of tax residency is determined by the "totality of circumstances," not a single date. You file a departure declaration and hope the Belastingdienst agrees with your timing. France assesses the charge as part of your departure-year income tax return — filed the following year, which means the bill arrives months after you have already left.

Split-year treatment makes it worse. The Netherlands lets you split the tax year at your departure date. France does not — they tax the entire year. Germany sits in between: the obligation is assessed as of departure, but you remain tax-resident for the full calendar year unless you formally deregistered mid-year.

Here is the scenario that keeps our cross-border tax colleagues up at night. A client deregisters from Germany in June. Arrives in Russia in July. Russia's tax residency threshold is 183 days within any consecutive 12-month period — not aligned to the calendar year. So the client does not become a Russian tax resident until January. For six months, they are in a no-man's-land where neither country's treaty protection fully applies.

Critical: Russia's DTA Suspension (Presidential Decree No. 585, August 2023). On 8 August 2023, Russia partially suspended key provisions of double tax agreements with 38 countries designated as "unfriendly." The suspended list includes France, Germany, Spain, Austria, Denmark, Norway, and Italy — virtually all major EU countries that impose departure levies. The suspended provisions cover distributive articles on dividends, interest, royalties, capital gains, and employment income.

What this means in practice:

• DTA tiebreaker provisions with suspended countries are NOT currently operational. Taxpayers relocating from France or Germany to Russia cannot rely on treaty-based tiebreaker rules (permanent home, centre of vital interests) to resolve dual-residency conflicts during the transition period.
• The Netherlands-Russia DTA is NOT suspended. The Netherlands is not on the list of 38 countries. Dutch departing residents can still invoke treaty protections, and the Belastingdienst can enforce collection through bilateral DTA mechanisms.
• Credit relief may be unavailable. Without operational DTA provisions, double taxation on the same income during the transition period becomes a real risk for those departing France, Germany, or other suspended-treaty countries.

The OECD Model Tax Convention, Article 4, provides tiebreaker rules — permanent home, centre of vital interests, habitual abode, and nationality — applied in that order. However, these apply only where the underlying DTA is operational. For suspended treaties, resolution relies on unilateral domestic relief mechanisms, which are less predictable.

"The tiebreaker provisions are the primary defence against double taxation during the transition period," explains an international tax partner at a leading European law firm. "But following Decree 585, taxpayers from suspended-treaty countries must prepare alternative strategies — advance rulings, unilateral credit claims, and timing optimization become essential."

Recommended Planning Timeline

• T-18 months: Engage cross-border tax advisor; begin asset inventory and valuation; assess DTA status for your specific departure country
• T-12 months: Structure optimization; initiate Russia immigration process (Golden Visa application: approximately 90 days processing)
• T-6 months: Execute pre-departure transactions (loss harvesting, partial disposals); establish Russian banking and address
• T-3 months: File departure notifications with EU tax authority; finalize Russian tax residency setup
• T-0: Depart. Begin 183-day count in Russia.
• T+6 months: Russian tax residency achieved. File final EU tax return with departure levy declaration.

For a deeper treatment of how Russian tax residency works for foreign entrepreneurs, including the 183-day mechanics and exceptions, see our dedicated guide. Common questions about the residency process are also addressed in our tax residency FAQ.

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Four Ways to Legally Reduce the Bill

We are not going to pretend this is optional reading. If you are facing a six- or seven-figure departure levy, every strategy below is worth evaluating — and they compound when used together. The French case study later in this article reduced a EUR 1.35 million liability to EUR 399,000 by combining three of these four approaches.

All require 12-18 months of advance planning. All must comply with ATAD anti-abuse provisions, including the General Anti-Abuse Rule (GAAR) under Article 6. Shortcuts do not work here.

Timing Optimization: Loss Harvesting Before Departure

Realize capital losses in the departure year to offset taxable gains. Sell underperforming assets before the valuation date.

In France, losses can offset gains within the same PFU calculation. In Germany, loss offset between different income categories is limited — capital losses can only offset capital gains, not employment or business income.

Important: wash-sale rules may apply in several jurisdictions. The loss must be genuine, not a temporary disposal followed by repurchase.

Threshold Management: Getting Below the Triggers

Each country has specific thresholds below which the levy does not apply:

• France: Securities portfolio below EUR 800,000 — partial disposal before departure removes the entire portfolio from scope under Article 167 bis CGI
• Germany: Shareholding below 1% — requires genuine dilution through share issuance, not paper restructuring
• Netherlands: Shareholding below 5% — may require share sales or dilution

Anti-abuse provisions apply to all threshold reductions. As a senior tax counsel at a German Wirtschaftsprüfungsgesellschaft warns: "Reductions must be genuine and commercially motivated. A 2% to 0.9% dilution executed three months before departure, with no business rationale, will be challenged by the Finanzamt."

Jurisdictional Sequencing: The Two-Step Move

This strategy has the highest potential savings — and the highest risk.

Step 1: Relocate to an EU/EEA country without a departure levy or with favourable deferral (Portugal, Belgium, or Ireland). Step 2: After establishing genuine tax residency — typically 1–2 full tax years — relocate to Russia.

The arithmetic is compelling. A French entrepreneur facing EUR 1.34 million in unrealized gains charges (under the 31.4% PFU) could relocate to Portugal (no individual departure charge), spend 18–24 months establishing genuine residency, then move to Russia with zero liability.

The legal risks are substantial. ATAD Article 6 — the GAAR — authorizes EU member states to disregard any arrangement whose principal purpose is to obtain a tax advantage that defeats the object or purpose of the applicable tax law. If the French tax authority determines the Portuguese residency was a temporary staging arrangement, it can claw back the full deferred liability, plus penalties.

What NOT to Do

• Do NOT create artificial arrangements solely to avoid the departure charge
• Do NOT backdate departure or misrepresent tax residency cessation dates
• Do NOT temporarily transfer assets to relatives or trusts with plans to reacquire post-departure
• Do NOT assume DTAs automatically eliminate departure taxation — most treaties allocate taxing rights but do not prohibit this levy. For countries on Russia's suspended DTA list, treaty protections are currently inoperative.
• Do NOT ignore departure notification requirements — failure to notify can result in penalties and loss of installment or deferral options even for intra-EU moves

For HNWI evaluating their Russian Golden Visa pathway, the immigration application can be initiated concurrently with tax planning — the 90-day processing window fits naturally within the T-12 to T-9 month phase.

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The Other Side of the Equation — What Russia Does NOT Tax

We have spent this entire article talking about what EU countries take from you on the way out. Now look at what Russia does not take on the way in.

The list is short because there is almost nothing to list:

• No departure levy. Russia does not tax unrealized capital gains upon departure. Zero liability regardless of asset value or holding period.
• No entry tax. No tax on arriving residents' existing wealth. No declaration-based taxation on net worth brought into the country.
• No wealth tax. Unlike France's IFI (impôt sur la fortune immobilière), Spain's patrimonio, or Norway's formuesskatt, Russia imposes no annual charge on net worth.
• No inheritance tax. Abolished in 2006 under Russian Federal Law No. 78-FZ. Assets pass without estate or inheritance taxation — a significant advantage for multi-generational wealth planning.
• Personal income tax (NDFL). Progressive since 2025: 13% up to RUB 2.4 million; 15% from RUB 2.4M to RUB 5M; 18% from RUB 5M to RUB 20M; 20% from RUB 20M to RUB 50M; 22% above RUB 50 million (approximately EUR 500,000). Non-residents: 30%.
• Capital gains (realized). Same progressive NDFL rates for residents. Unrealized gains are not taxed.
• CFC rules. Russia requires residents controlling foreign companies (>25% stake) to disclose ownership. CFC profits may be attributed to the Russian resident — but taxed at 13–22%, not EU rates of 30–55%.

Under Russian Federal Law No. 78-FZ (2005), inheritance and gift taxes were abolished effective 1 January 2006. Combined with a progressive personal income tax starting at 13% and the absence of wealth, departure, and entry levies, Russia's tax structure for incoming residents remains among the most favourable in the G20, based on OECD Tax Database comparative data (2025).

France vs Russia — Tax Comparison for HNWI:

Russia's tax position is comparable to the UAE (0% income tax) but with additional structural advantages: DTAs with 80+ countries (though 38 are currently partially suspended under Decree 585), full banking infrastructure, and — under the Golden Visa programme — no requirement to maintain continuous physical presence for residency maintenance.

For a comparative view of how Russia stacks up against other HNWI destination jurisdictions, see Russia vs UAE vs Kazakhstan residency for HNWI and Russia vs Turkey vs Serbia residency comparison.

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Case Study: Reducing Departure Tax by 70% Through Strategic Planning

A well-planned EU-to-Russia relocation can reduce the assessed obligation by 60–80% through a combination of timing optimization, threshold management, and proper jurisdictional structuring. The key is starting 12–18 months before the intended departure.

Note: This case study is illustrative and does not represent any actual client. Names and specifics are fictional. It is not a recommendation or guarantee of outcomes.

Profile: "Marc" — French Tax Resident, Entrepreneur

• Age 52, French national, tax resident in France for 14 years
• Owns 80% of a SAS (société par actions simplifiée) valued at EUR 4 million, cost basis EUR 200,000 — unrealized gain: EUR 3.8 million
• Listed securities portfolio: EUR 1.2 million (above EUR 800K threshold), cost basis EUR 700,000 — unrealized gain: EUR 500,000
• Total unrealized gains subject to departure levy: EUR 4.3 million
• France's plus-values latentes (latent gains) on the combined portfolio
• Unplanned departure liability: EUR 4.3M x 31.4% PFU = EUR 1,350,200

The 18-Month Mitigation Strategy

T-15 months — Loss harvesting. Marc sold underperforming fund positions at a EUR 120,000 loss. Offset against listed securities gains, reducing the securities base from EUR 500,000 to EUR 380,000.

T-12 months — SAS restructuring. Diluted personal shareholding from 80% to 49% through a documented employee stock option plan and spouse share transfer. At 49%, the per-share base was recalculated on the reduced stake. This restructuring had independent business justification — succession planning and employee retention — which satisfied anti-abuse requirements under French law.

T-9 months — Partial disposal. Sold EUR 300,000 of listed securities, paying CGT at 31.4% (EUR 94,200 in tax). Reduced the securities portfolio below EUR 800,000 — removing it entirely from scope under Article 167 bis CGI.

T-8 months — Golden Visa application. Filed Russian Golden Visa through the government bond investment track (RUB 50 million, approximately EUR 500,000). Processing time: approximately 90 days.

T-4 months — Establishing Russian centre of vital interests. Signed apartment lease in Moscow, opened a Russian bank account, enrolled child in an international school. These documented facts support residency claims — though given Decree 585's suspension of the France-Russia DTA, Marc's advisors structured the timeline to ensure clear cessation of French residency before Russian residency establishment, avoiding the overlap period where treaty tiebreakers would normally apply.

T-2 months — Departure notification. Filed departure declaration with the Service des Impôts des Particuliers. Declared the remaining liability on the diluted SAS stake.

Tax Savings Achieved

Professional fees — cross-border tax advisor, French avocat fiscaliste, Russian immigration attorney — totalled approximately EUR 45,000. Net benefit after fees: EUR 906,200. Ongoing annual tax savings (France marginal rate 45% reduced to Russia's 13–22% on EUR 200,000 income): approximately EUR 50,000–64,000 per year. (Illustrative calculation based on French tax law and Russian NDFL rates as of Q2 2026.)

"The 12–18 month planning window is not a luxury — it is the difference between paying the maximum assessed amount and achieving reductions that fund the entire relocation cost several times over," observes a wealth structuring advisor at a European private bank.

For those relocating business operations alongside personal residency, our guide to starting a business in Russia for foreigners covers entity formation, corporate tax, and operational requirements.

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The Questions Everyone Asks

"Which countries actually impose this levy?"

France, Germany, the Netherlands, Spain, Austria, Denmark, Norway, and Italy all impose departure charges on individuals — rates from 19% to 42%. Sweden has no formal levy but maintains a 10-year extended jurisdiction rule on Swedish shares, which achieves a similar result. Portugal, Belgium, and Ireland do not impose individual departure taxation. That matters.

"Does Russia have anything like this?"

No. Nothing. Zero exit tax on departing residents. Zero entry tax on arriving residents. You can build a EUR 50 million portfolio during 20 years of Russian tax residency, leave the country, and owe nothing on unrealized gains. The Russian Tax Code (Chapter 23) only taxes realized gains.

"Can I defer the payment since I am moving to Russia?"

Almost certainly not. Every EU deferral and installment provision we have reviewed is restricted to intra-EU/EEA moves. Germany's 2022 reform of Section 6 AStG eliminated the previous indefinite deferral for non-EU departures entirely — immediate payment required. France defers only for qualifying EU/EEA destinations. The Netherlands assesses a conserverende aanslag with enforcement rights through the Russia-Netherlands DTA, which — notably — is still operational because the Netherlands was not among the 38 countries in Russia's 2023 treaty suspension.

"What about the Portugal-then-Russia route?"

Legally possible. Practically risky. Portugal has no individual departure charge, so a genuine relocation there followed by a later move to Russia could eliminate the levy entirely. The key word is genuine — actual residence, economic activity, social ties, typically for 1-2 full tax years. ATAD Article 6 (GAAR) lets tax authorities claw back deferred liability plus penalties if they determine the intermediate residency was a staging arrangement. We have structured these transitions successfully, but they require meticulous documentation and cannot be rushed.

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Start Now or Pay More Later

We will be direct about this: the 12-18 month planning window is not a recommendation. It is a hard requirement. Every month you wait narrows the available strategies. Loss harvesting needs time. Equity restructuring needs business justification that cannot be fabricated overnight. Jurisdictional sequencing — if you go that route — needs genuine residency that takes a year or more to establish.

The departure cost is significant. But it is manageable. France, Germany, and the Netherlands impose the worst levies and deny deferral for non-EU moves. Russia, on the receiving end, imposes nothing — no departure levy, no entry tax, no wealth tax, no inheritance tax, and a progressive income tax starting at 13%.

The math works. But only if you start early enough to make it work.

Talk to us if you want a specific analysis based on your departure country, asset portfolio, and timeline. We coordinate the cross-border tax planning with Russian immigration structuring — both need to move in parallel, and most advisors only handle one side.

For context on how Russia's FATF status affects investors, see our dedicated analysis.