Tax exile is a booming phenomenon, both in terms of the profiles affected and the destinations, and at the heart of these departures is a costly, complex and unstable French tax system.
Dear French people living abroad,
You are often singled out by some in the media and the political arena. However, anyone with a little knowledge of the subject knows that "tax exiles" - French people who leave France to settle permanently outside the country - do so for a whole range of reasons. Among the main factors, many cite the unwieldiness and complexity of the French tax system.
And, as you well know, contrary to some people's shortcuts, tax exile has nothing to do with tax optimization or tax evasion: it's all about living abroad, usually with your whole family. So there's no point in criticizing French people who leave, and it certainly won't convince you to return!
Especially since the election of François Hollande, tax exile has continued to accelerate, with more French taxpayers moving abroad than ever before. According to the French Ministry of Foreign Affairs, the French community established outside France now stands at 1.6 million, representing a total of 2 to 2.5 million French citizens.
In addition to this increase in the number of departures, there's another recent feature in the change in destinations. While the arrival in power of François Mitterrand in 1981 led to the flight of large French fortunes abroad, the countries concerned were mainly limited to Switzerland, followed by England and Belgium. Today, the French are also heading for Morocco, Thailand and Portugal. For example, the Ministry estimates the French community in Portugal at around 30,000 (updated June 2015).
What's new is that tax exile also concerns a much broader spectrum of social categories. Gone are the fantasies of the "rich" moving abroad: many middle-class families, students and young professionals are leaving our country early to make a life for themselves elsewhere. More and more retirees are also spending their retirement years abroad.
Yet France is not condemned to fiscal hell. Major reforms need to be implemented immediately after the 2017 presidential election. As a matter of urgency, taxes must be reduced, with a 10% cut in income tax, abolition of the wealth tax (ISF) and exemption from inheritance tax so that our heirs can benefit from the fruits of our labor, so that "transmission" is no longer a dirty word. Inheritances up to 400,000 euros must be exempt from this tax, which today adds tax to tax right up to the grave.
