Aliyah from France: Complete Tax Guide for 2026

TL;DR for French olim:

• Article 167 bis exit tax applies, but deferral and eventual cancellation are typically available.
• Close or unwind PEA before departure to lock in French tax-free status.
• Assurance-vie often needs restructuring to align with Israeli post-exemption taxation.
• French real estate keeps generating IFI and French-source income tax — restructure or sell pre-Aliyah.
• The 10-year Israeli exemption window is ideal for pension drawdowns and large foreign-source disposals.

The Exit Tax — Article 167 bis CGI

When a French tax resident transfers residence abroad, holding either: (a) securities worth ≥€800,000, or (b) ≥50% of a company's profits, France imposes immediate tax on latent gains and certain claims. The taxpayer can request automatic deferral when moving within the EU/EEA or to states with a tax-and-mutual-assistance agreement — Israel qualifies for deferral subject to filing requirements.

The tax is cancelled (degrèvement d'office) if the assets are still held after the relevant period (now 2 years for portfolios under €2.57M, 5 years above). Selling triggering assets during the holding period triggers payment.

Practical workflow:

• Identify all securities and corporate holdings as of departure.
• Form 2074-ET filed with the year-of-departure return.
• Track holdings annually with Form 2074-ETD.
• Don't sell triggering positions during the holding period.
• Track the cancellation date carefully — that's when the planning truly delivers.

PEA and Assurance-Vie: The Wrapper Problem

PEA

A PEA held more than 5 years is income-tax-free in France (social charges still apply). Many olim close the PEA before departure to bank the favorable French treatment, since the wrapper's value diminishes once non-resident.

Assurance-vie

Assurance-vie remains a powerful structure even for non-residents, but Israel taxes contract gains after the 10-year exemption ends. Pre-Aliyah review questions:

• Is the contract older than 8 years (best French regime)?
• Should you migrate to a Luxembourg-domiciled wrapper for cross-border flexibility?
• Is partial surrender pre-Aliyah optimal to reset basis?

Real Estate and IFI

French real estate continues generating:

• Income tax on rental income at non-resident rates (with treaty relief).
• IFI wealth tax above €1.3M net French real-estate holdings.
• Plus-values immobilières on sale.

Common restructuring: sell underperforming positions pre-Aliyah, retain primary holdings through an SCI or SARL where appropriate, and monitor the IFI threshold.

Pre-Aliyah Checklist for French Residents

• Identify exit-tax exposure and prepare Form 2074-ET.
• Decide on PEA closure or maintenance.
• Review assurance-vie contracts and wrapper jurisdiction.
• Address French real estate (sell, restructure, or keep with IFI plan).
• File a déclaration de départ and update tax address.
• Document residence transition under CGI Article 4B.
• Plan succession-tax exposure separately.
• Coordinate with Israeli pre-Aliyah advisor on the 10-year window strategy.

The France-Israel Treaty — Key Articles

• Article 4 (Residence): tie-breaker tests — center of vital interests, habitual abode, nationality.
• Article 6 (Immovable property): France keeps taxing rights on French real estate.
• Article 13 (Capital gains): generally taxed in the residence country, with real-estate carve-outs.
• Article 18 (Pensions): private pensions usually taxed in residence country — Israel for olim.
• Article 23 (Relief from double taxation): the FTC framework.

Year-by-Year Timeline

• Year −1 to 0: Exit-tax filing, PEA closure, real-estate restructuring, déclaration de départ.
• Year 1: Israeli filing as oleh; French exit-tax deferral tracking begins.
• Years 2–5: Cross the exit-tax cancellation threshold; track Form 2074-ETD.
• Years 1–10: Use exemption window for pension drawdowns and asset realignment.
• Year 11+: Full Israeli worldwide taxation; French-source income coordinated via treaty.

Pair this with our 10-year exemption deep dive and run estimates in the Aliyah Tax Calculator.