Does France tax me when I move to Cyprus?

France imposes an exit tax (impôt de sortie) on unrealised gains above certain thresholds. Moving to Cyprus (an EU member state) qualifies for automatic deferral — you pay no tax on departure, only when you sell the shares or move outside the EU.

What is the French flat tax (PFU) and how does Cyprus compare?

France's PFU (Prélèvement Forfaitaire Unique) taxes dividends and capital gains at 30% flat. As a Cyprus non-dom, you pay 0% SDC on dividends plus 2.65% GeSY — an effective rate of 2.65% vs France's 30% on dividend income.

Is the Cyprus CIT rate lower than France's?

Yes. Cyprus applies 15% CIT; France applies 25%. For a company generating €1 million in taxable profits, the difference is €100,000 per year — before considering IP Box benefits where the effective rate can fall to approximately 2.5%.

🇫🇷12.5% CIT vs 33% — save on management fees too

Relocating from France to Cyprus

If you're a French entrepreneur tired of 33% corporate tax, management fees scrutinised by the fisc, and a potential return of wealth tax, Cyprus offers a transparent, EU-legal alternative.

French founders increasingly use Cyprus as a holding jurisdiction for dividends, IP income, and capital gains — all within the EU, all fully treaty-covered.

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Your Situation

Why France entrepreneurs are considering a move

French Corporate Tax at 25%

France's standard CIT rate is 25% (reduced from 33.33% in 2022, but still one of the highest in the EU). For companies with IP income, R&D credits offer some relief — but the effective rate for most businesses remains significantly higher than Cyprus's 15%.

Management Fees and Abus de Droit

French companies paying management fees to foreign holding companies face intense scrutiny from the Direction Générale des Finances Publiques (DGFiP). Any fee arrangement lacking genuine substance is recharacterised as abuse of law. Cyprus management fees must be backed by real services and market pricing.

ISF/IFI Wealth Tax Legacy and Political Risk

France abolished the ISF (Impôt de Solidarité sur la Fortune) in 2018 and replaced it with the IFI (Impôt sur la Fortune Immobilière), limited to real estate. However, political pressure for a broader wealth tax restoration exists — entrepreneurs with significant asset portfolios are watching this closely.

PEA Portfolio Liquidation Before Departure

French residents holding a PEA (Plan d'Épargne en Actions) benefit from tax-exempt capital gains after 5 years. Before departing France, careful planning around PEA liquidation, the exit tax (impôt de sortie), and CGT timing is essential.

What Cyprus Offers You

Five reasons France founders choose Cyprus

15% CIT vs France's 25% — material saving for profitable subsidiaries
Cyprus-France DTT: reduced WHT on dividends (10–15%), interest (10%), royalties (0%)
Non-dom 0% SDC on dividends: combined effective rate on dividends dramatically lower than France's flat tax PFU of 30%
0% capital gains tax on shares — versus French impôt de sortie on departure
No wealth tax, no ISF/IFI equivalent in Cyprus

Relocation Timeline

From decision to first day as a Cyprus tax resident

French exit tax (impôt de sortie) reviewMonth 1–2

Model deemed disposal on shareholdings exceeding €800,000 threshold, assess EU deferral options for Cyprus relocation.

Cyprus structure and entity setupMonth 2–4

Cyprus LTD incorporated, management fee arrangement documented, substance established.

PEA and French portfolio planningMonth 3–5

PEA liquidation or transfer planning, French income cessation modelling, French de-registration.

Cyprus residency confirmedMonth 5–7

60 days in Cyprus satisfied, TIC and non-dom status issued, French exit tax deferred under EU provisions.

Frequently Asked Questions

France-specific questions

Does France impose an exit tax when I leave for Cyprus?

Yes. France's impôt de sortie applies to unrealised gains on shareholdings exceeding €800,000, or where the shareholding represents more than 50% of a French company. As Cyprus is an EU member state, you can apply for automatic deferral (sursis de paiement) during EU residence. The tax is only triggered when you dispose of the shares or leave the EU.

Can I pay management fees from France to my Cyprus holding company?

Yes, but they must be commercially justified. Management fees paid to a Cyprus company must reflect genuine services provided, be priced at arm's length, and be documented with contracts and evidence of services rendered. Substance in Cyprus — directors, office, actual decision-making — is essential to rebut any DGFiP challenge.

Is there a Cyprus-France double tax treaty?

Yes. The Cyprus-France DTT is in force and provides for reduced withholding tax on dividends (10% or 15%), interest (10%), and 0% on royalties in certain cases. It also provides a tiebreaker for dual residence and covers exit scenarios.

Should I liquidate my PEA before leaving France?

This depends on the value of the PEA, whether it has already passed the 5-year threshold, and your French exit tax position. In many cases, liquidating the PEA while still a French resident (benefiting from the PEA CGT exemption) before the exit tax kicks in is more efficient than retaining it. However, individual modelling is essential.

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Legal Disclaimer: This page is for general informational purposes only and does not constitute legal or tax advice. Tax laws change frequently. Always seek independent professional advice tailored to your specific circumstances before making relocation or tax planning decisions.