The Last “Raid”: 8 Countries That Charge You for Leaving

Most people spend months choosing where to move: they compare tax systems, residency programs, and quality of life. But there’s one question that’s often ignored until the very last moment: what amount your current country might demand just for you leaving?

We’re talking about exit tax — a tax on “exits” (in practice, on unrealized capital gains). Authorities treat your assets as if you sold them on the day you stop being a tax resident (or — in some countries — when you renounce citizenship). Nothing is actually sold on paper, yet tax is charged on “virtual” profit. And yes: you might not have the cash to pay, even though the payment deadline still arrives.

For anyone building a global mobility plan or considering tax-friendly territorial jurisdictions, exit tax becomes a hidden “relocation cost.” Sometimes it can wipe out a carefully designed strategy in a single tax report.

How exit tax works

The mechanics are similar across countries, though details differ. At the moment tax residency ends (in the U.S., upon renouncing citizenship), the government performs a deemed disposition. Shares, business ownership interests, real estate, and (in some systems) pension accounts are valued at fair market value. The difference between that valuation and your original “entry cost” becomes a taxable capital gain.

This is how countries tax wealth you haven’t realized yet. Rates depend on the jurisdiction — from 15% to 42%. Some countries offer deferral, others require immediate payment or ask for security. In certain cases, they even attempt to collect the tax after you’ve left.

In practice, countries with exit tax fall into two groups. The first ties the tax to a change in tax residency: you move and stop being a tax resident for tax purposes — exit tax applies. That’s how it works, for example, in Canada, Australia, Norway, and most European countries. The second group is the near exception: in reality, it’s basically limited to the United States, where the trigger is citizenship.

United States: the “citizenship trap”

The U.S. is one of only two countries in the world (the other is Eritrea) where taxation is based on citizenship, not residency. An American living in the UAE (where personal income tax is usually absent) remains in the IRS’s sights. Moving to a “low-tax” country doesn’t solve the problem — the only exit is renouncing U.S. citizenship.

When a U.S. citizen renounces citizenship or a long-term green card holder (8 years within the last 15) loses status, the IRS applies a mark-to-market exit tax to worldwide assets. Property is treated as if it were sold at fair market value the day before the expatriation date.

The tax applies only to so-called covered expatriates. The classification starts if any threshold is met: net worth of $2 million or more; average annual federal tax liability above $211,000 over the last 5 years (for 2026); or failure to certify full tax compliance for 5 years on Form 8854.

In 2026, there’s a one-time relief: the first $910,000 of unrealized gain can be excluded. The remainder is taxed at standard capital gains rates. Retirement accounts are treated more harshly: for IRAs, there is a deemed “full distribution” the day before expatriation, leading to immediate taxation at ordinary rates on the entire remaining balance.

Consequences can also extend to the family. If a covered expatriate makes gifts or leaves an inheritance, recipients may face estate/gift tax up to 40% beyond the annual exemption. And if a parent renounces citizenship while a child remains a U.S. citizen, the child could lose nearly half of the future inheritance.

Another separate risk is double taxation when rules don’t align. For example, a U.S. person with an asset in Portugal may pay U.S. exit tax on the deemed sale. Later, when the real sale happens, Portugal may tax the full gain from the original cost basis. The U.S. may offer a formal “step-up,” but Portugal does not recognize the hypothetical sale.

That’s why few U.S. millionaires actually “leave”, even if U.S. tax rates keep rising: for most people, the “cost of exiting” is simply too high.

Canada: broad coverage and immediacy

Canada introduces a departure tax for any individual who stops being a Canadian tax resident — regardless of citizenship. The state assumes you’ve disposed of most worldwide assets at fair market value right before departure.

The scope is wide: stocks, fund units, cryptocurrency, foreign real estate, interests in partnerships, and shares of private companies. At the same time, Canadian real estate, registered pension accounts (RRSP, RRIF, TFSA), and your principal residence are excluded from the deemed disposition.

Capital gains are taxed through inclusion: a 50% inclusion rate is used, meaning half of the gain is added to taxable income and taxed at your marginal rate. In 2024, there was a proposal to raise the inclusion rate to 66.67% for gains above $250,000, but the decision was postponed in January 2025 and then canceled. As a result, the inclusion rate remains a flat 50% for all capital gains. The Lifetime Capital Gains Exemption for qualifying small business and farm/fishery property is preserved (increased to $1.25 million).

For business owners holding equity in private companies with multi-million growth in value, the exit bill can reach seven-figure amounts.

Deferral is possible: you can postpone payment until the real sale by filing Form T1244. If the deferred federal tax exceeds $16,500, you usually must provide security to the CRA — most often a bank guarantee or a charge over Canadian assets. If, at the time of departure, you have real estate worth more than $25,000, you’ll also need Form T1161 with full asset disclosures.

A plus of the Canadian model: if you return and re-establish Canadian tax residency, you can elect a “reverse” exit tax for assets you still hold — effectively reversing the deemed disposition.

Japan: a low threshold that catches expats

In Japan, exit tax has applied since July 2015 for Japanese citizens and since July 2020 for foreign residents. It applies if a person holds financial assets totaling at least ¥100 million (about $660,000) and has lived in Japan for more than five years within the last ten.

The threshold is low by global standards. If the U.S. starts at $2 million of net capital and many European rules focus on business owners, Japan’s limit may catch even expats with a relatively “standard” portfolio: RSUs, stock options, and other instruments accumulated over years in the country.

Rate: 15.315% (15% national income tax + 0.315% reconstruction surcharge). A local tax of 5% may also apply, pushing the effective rate close to 20.315%. The deemed disposition covers securities, ETFs, fund units, bonds, options, and derivatives. Cash, bank deposits, real estate, and cryptocurrency are excluded from both the asset threshold and the tax base.

There’s a nuance regarding visa types: foreigners on certain categories (for example, Table 1: Engineer/Specialist in Humanities, Intracompany Transferee, Business Manager) generally aren’t counted toward “resident years.” On Table 2 (including permanent residency and spouses of Japanese nationals), they are counted. As a result, many long-term expats who obtain permanent resident status can face unexpected consequences.

Deferral is available up to 10 years (initial 5 + an additional 5 extension), but it requires appointing a tax agent in Japan and providing security equal to the tax liability. If you return to Japan during the deferral period, the tax is canceled for assets you still hold.

Norway: one of the harshest regimes in Europe

Norway has tightened exit tax rules regularly since 2022, and the current setup is among the most aggressive in Europe. Updates have also been linked to the 2025 budget.

When a Norwegian tax resident moves abroad, exit tax applies to “hidden” gains on shares, equity savings accounts, and insurance products. The basic allowance is NOK 3 million (about $280,000). Anything above is taxed at an effective rate around 37.84%: a 22% rate multiplied by an adjustment factor of 1.72.

The 2025 changes removed one key “get-out”: previously, you could defer the tax and effectively avoid it by holding shares long enough. Now there are three scenarios: pay in full on the day of departure; choose 12 annual installments without interest; or pay a lump sum at the end of the 12-year deferral period with interest.

If the taxpayer returns to Norway within 12 years, the tax for remaining assets is canceled. If the person dies during the deferral period, Norwegian resident heirs aren’t liable for the tax, while heirs outside Norway are.

Another important change: dividends received after the move accelerate payment of the exit tax. 70% of any distributions must go toward settling the remaining liability. This closes a strategy where value was “extracted” through dividends abroad, then the investor returned and sold the now-devalued shares.

Norway also stopped crediting foreign taxes paid upon a real sale against Norwegian exit tax. Any request to eliminate double taxation must now be made in the country of your new residency.

In June 2025, the EFTA Surveillance Authority sent Norway an official information request as part of a review of compliance with the EEA rules on free movement. This is still preliminary, but the outcome could lead to adjustments.

France: an exit tax with a short fuse

In France, exit tax applies to individuals who have been tax residents for at least 6 years out of the last 10 and who hold share packages/financial instruments worth more than €800,000 or control more than 50% of a company.

The rate is 30% (12.8% fixed income tax + 17.2% social contributions). Automatic deferral applies when moving to the EU/EEA, as well as to countries with qualifying tax treaties. Moving to “non-cooperative” jurisdictions or to countries without agreements on combating tax fraud may allow deferral by request, but it can require guarantees.

For departures after January 1, 2019, the “forgiveness” rules were significantly tightened: if you hold the securities without selling them for two years after departure, exit tax may be canceled provided the total value of taxable instruments was below €2.57 million. If the value exceeded the threshold, the holding period increases to five years. For those who left France in 2014–2018, the old forgiveness period of 15 years remains.

At the same time, France is facing a growing political push for “long-term tax follow-up” after relocation: October 2025 — the Finance Committee of the National Assembly supported an amendment under which wealthy citizens would continue paying French taxes for up to 10 years after moving to low-tax jurisdictions. In November 2025, the proposal failed by just one vote — but the trend toward expanding post-exit tax responsibility remains.

Denmark: the lowest threshold in the world

Denmark’s exit tax (fraflytterbeskatning) applies if a person was taxable in Denmark for at least 7 years out of the last 10 and holds shares with a market value from DKK 100,000 (about $14,000). This is the lowest threshold among countries with exit tax: tax consequences can affect a much broader group than models designed for ultra-wealthy individuals.

Unrealized gains are taxed at Denmark’s standard “share income” rates: 27% on gains up to DKK 79,400 (for 2026) and 42% above that. For spouses, the lower threshold doubles to DKK 158,800.

Since March 2015, there has also been a general exit tax covering foreign real estate, speculative assets, and interests in companies. Deferral is available. In addition, you can opt for taxation “as if you were still living in Denmark”: you declare gains and losses annually. Within the EU and Northern Europe, security is usually not required.

Germany, Spain, and the Netherlands

Germany is oriented toward equity stakes from 1% in a company. The tax base is calculated as the deemed gain based on fair market value on the day before departure. Since 2022, Germany no longer distinguishes deferral for moves within the EU/EEA versus moves outside the EU. Payment can be made in installments: seven annual payments without interest regardless of destination. From 2025, the rules also apply to interests in investment funds above €500,000. The effective burden can reach 28.5% (including the solidarity surcharge).

Spain introduced exit tax in 2015. It applies to individuals who have been tax residents for at least 10 years out of the last 15 and who hold company interests above €4 million, or a stake above 25% whose value exceeds €1 million. Rates from 2025 range from 19% to 30% (after adding a top bracket for gains above €300,000). Moves to the EU/EEA can qualify for a 10-year deferral, and if you return within that period, the tax may be avoided entirely. If the move is to jurisdictions Spain classifies as “tax havens,” tax on worldwide income can be withheld up to five years after departure.

Netherlands taxes “substantial interests,” defined as owning at least 5% of shares. Since 2024, a two-tier scheme applies: 24.5% on the first €67,804 of gains and 31% on amounts above that. Moving to the EU/EEA provides automatic interest-free deferral — you pay only upon a real sale. In October 2024, the Dutch parliament instructed the government to work on additional exit tax measures amid concerns that wealthy taxpayers are relocating to low-tax jurisdictions.

Austria: no threshold — full coverage

Austria applies exit tax at a rate of 27.5% on unrealized gains across all financial assets and sets no minimum threshold. Even if you own a single stock that has increased in value, the gain may be taxed upon departure.

If you move to the EU and EEA, you can request a tax assessment but pay later — when you actually sell the assets. In effect, you can obtain a long deferral without interest while holding securities. If you move outside the EU/EEA, you must pay immediately, with no installment option.

The lack of a threshold makes Austria one of the most “broad” regimes, while deferral within Europe is comparatively less painful than in other countries.

Australia and South Africa

Australia implements departure tax through what the ATO calls CGT Event I1. When you stop being an Australian tax resident, it is treated that you have “disposed” of all non-exempt Australian assets at market value. Australian real estate and assets used in an Australian business are excluded.

You can choose capital gains deferral, but it’s “all or nothing”: either you include all eligible assets or you don’t. Deferred assets are classified as “taxable Australian property,” and Australia retains the right to tax them upon a later real sale. The standard 50% CGT discount for assets held for more than 12 months applies proportionally based on Australian residency periods after May 8, 2012. From January 1, 2025, the withholding rate on gains for foreign residents increased to 15%, with no minimum threshold.

South Africa applies exit tax under its capital gains tax (CGT) regime. When tax residency ends, there is a deemed sale of worldwide assets at market value. South African real estate is excluded — it remains within South Africa’s tax net even after you leave. The maximum effective CGT rate for individuals is about 18% (via a 40% inclusion into the top marginal income tax rate of 45%).

United Kingdom: no exit tax for now, but the trend is clear

In the UK, there is currently no exit tax. In April 2025, the non-domicile regime was abolished and replaced with the Foreign Income and Gains (FIG) system, where all residents are taxed on worldwide income from day one, but new arrivals get a four-year exemption.

At the end of 2025, reports emerged in the media that the government is considering a 20% “settling up charge” on gains “baked into” assets at the time of departure. Estimates suggest around £2 billion per year. The Treasury confirmed it is modeling options, but no official decision has been made yet.

Where exit tax does not apply

Italy and Portugal — popular destinations for investment migration — do not impose exit tax. That means there is no deemed disposition of assets upon exit. For investors leaving jurisdictions with high exit tax, this is a major advantage: you preserve “optionality” for future moves without triggering an additional exit tax event.

Belgium and Switzerland also do not apply exit tax. Sweden and Finland use a different approach: there’s no “exit” tax, but there are clawback rules — the right to tax gains if shares are sold within a defined period after departure (for example, up to 10 years in Sweden).

What it means for your relocation strategy

Exit tax changes the logic of international relocation. Moving to a territorial jurisdiction with zero taxes or to a country with a favorable cryptocurrency tax regime only delivers the full benefit when you can actually leave your current country without a large “exit bill”.

The key factor is timing. Exit tax is charged on unrealized gains. The longer you hold assets — and the more they increase — the larger the potential tax amount.

That’s why planning should start at least 18–24 months before moving: it may reduce or eliminate liability through legal methods such as restructuring assets, transfers (gifts), and choosing an optimal relocation moment to smooth tax exposure across years.

Another trap is the 183-day rule used to determine tax residency. Many people think that if you “spend time nowhere” for long enough, you can avoid exit tax in the source country and taxes in the destination country. But most jurisdictions look beyond days: they consider the center of vital interests, permanent housing, habitual presence, and formal ties. They can “outweigh” the 183-day rule.

As a rule, countries with a wealth tax are more likely to tighten exit tax. Norway is the clearest example. The political logic is simple: if you tax wealth every year, you need a mechanism to capture the gains that wealthy individuals will take with them. Expect other countries to replicate this model.

For affluent investors, the question now becomes different: not only where to move, but also from where you can afford to actually exit.

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