Leaving France for Andorra for tax purposes

Becoming a non-resident for French tax purposes: the criteria of Article 4 B

A move to Andorra only has a tax effect if you no longer meet any of the three criteria of Article 4 B of the French General Tax Code. Just one is enough for you to remain domiciled for tax purposes in France and to be taxed there on your worldwide income:

• your home or your principal place of stay: a family that has stayed in France, for example;
• a professional activity carried on in France, unless it is ancillary there;
• the centre of your economic interests: main investments, seat of your business, main source of your income.

The directors of companies whose registered office is in France and whose turnover exceeds €250 million are also considered, unless proven otherwise, to carry on their main activity in France. If France and Andorra both consider you a resident, the tax treaty decides, first according to your permanent home; since 16 February 2025, Article 4 B has expressly provided that you are not domiciled in France if the treaty designates you as a resident of Andorra. You still need to be able to prove your Andorran tax residency. On the Andorran side, you will also need a residence authorisation: see how to obtain a residence permit in Andorra.

Tax return for the year of departure: forms 2042 and 2042-NR

In France, the year of departure is declared in two parts, before and after the date of departure. The procedure, according to the French tax authorities:

1. 1

   Report your new address

   From your Finances publiques online account, to your last public finance office. Also inform your employer and your pension funds if you still receive salaries or pensions, as the way they are taxed may change.

2. 2

   The following year, declare the income for the year of departure

   On return No. 2042, the income received from 1 January to the date of departure; foreign-source income for that period goes on form No. 2047.

3. 3

   Add the French-source income received after departure

   On return No. 2042-NR, only the French-source income taxable in France, from the date of departure to 31 December.

4. 4

   Then come under the non-residents’ tax office

   Once this return has been processed, the tax office for non-resident individuals handles your file if you keep taxable French income, as well as any tax on real estate wealth you may owe. Local taxes remain handled by the tax office where the property is located.

Two practical tips from the tax authorities: create your online account before you leave, and keep a bank account held in France or in the SEPA area so that you can pay online. On the Andorran side, your first income is declared from 1 April to 30 September of the following year: see filing a tax return in Andorra.

Exit tax and Andorra: who is affected (€800,000 or 50%)?

You are affected by the exit tax (Article 167 bis of the French General Tax Code) if two conditions are met:

• you have been domiciled in France for tax purposes for at least 6 of the 10 years preceding departure;
• together with your tax household, you hold, on the date of departure, at least 50% of the profits of a company, or a securities portfolio with a total value of more than €800,000.

It then taxes, at the time of departure, the unrealised gains on your securities, as if you were selling them: shares, holdings in companies, bonds and fund units, as well as earn-out receivables and capital gains placed under tax deferral. Securities held in a PEA or a PEA-PME (French equity savings plans) are excluded, as are shares in property-rich companies subject to a special regime.

Calculation, rates in 2026 and cancellation after 2 or 5 years

Each unrealised gain is the difference between the value of the securities on the day of departure and their acquisition price or value. For listed securities, the value used is the last known price or the average of the last 30 prices; for unlisted securities, their market value must be estimated. The gain is then taxed like a sale:

income taxflat rate

12.8%

social leviesdeparture in 2026; 17.2% for a departure in 2025

18.6%

in totaldeparture in 2026

31.4%

An option for the progressive scale is possible; it then covers all the household’s income from movable capital and capital gains for the year of departure. Return No. 2074-ETD exists only in paper form. The tax is then cancelled or refunded if you keep the securities for 2 years after departure (total value of less than €2.57 million at departure) or 5 years (above that), or if you return to France while still holding them.

Payment deferral is not automatic for Andorra

For a move to Andorra, the payment deferral must be requested: the official notes published in 2026, for departures in 2025, list the States that give automatic entitlement to it, and Andorra is not on that list.

This deferral postpones payment of the exit tax until a triggering event, the sale of the securities for example. It is automatic for a move to a European Union State, or to a State that is bound to France by an administrative assistance agreement and a recovery assistance agreement and is not non-cooperative. In other cases, the request involves three steps:

• file return No. 2074-ETD with the tax office for non-resident individuals no later than 90 days before departure;
• appoint a tax representative established in France;
• offer guarantees capable of securing recovery: for income tax, 12.8% of the amount of the gains and receivables.

Without deferral, the tax is payable immediately, then cancelled or refunded under the conditions seen above (securities kept for 2 or 5 years, or return to France). Conversely, a sale, buy-back or cancellation of the securities ends the deferral. If these securities are those of your company, see also how to relocate your company to Andorra.

What remains taxable in France

Even once you are a resident of Andorra, some French-source income remains taxable in France, under the France⁠–⁠Andorra tax treaty:

Summary of the France⁠–⁠Andorra treaty. Andorra deducts the French tax from its own tax, up to the amount of the Andorran tax.

This income is declared each year in France on the non-residents’ return. Unless you opt for the average rate, the tax is calculated at the minimum rate of 20% up to €29,579 of net taxable income (2025 income), then 30% above that; the average rate, calculated on your worldwide income, applies only if it is more favourable to you.

Two other taxes may remain payable in France: the tax on real estate wealth (IFI), if your net French real estate assets exceed €1,300,000, and inheritance tax, on assets located in France and on everything received by an heir who has been domiciled in France for at least 6 of the last 10 years: see our guide France⁠–⁠Andorra inheritance. What happens to your French investments after departure is set out in our guide to dividends and capital gains.

The departure timetable, from D-6 months to Y+1

Before departure, only one deadline is set by the texts: the request for deferral of payment of the exit tax, no later than 90 days before departure. The income tax returns then follow, the year after, in France and then in Andorra:

Y: year of departure. The milestones “D-6 months”, “Before departure” and “D-day” are indicative; the other dates follow from the texts and the 2074-ETD notes.

Checklist: leaving France for Andorra, step by step

• Check that you will no longer meet any criterion of Article 4 B: home, professional activity, economic interests.
• Obtain your Andorran residence authorisation and your housing, then organise the move of your household.
• Decide what happens to your French business: sale, transfer or keeping it as an ancillary activity.
• Assess the exit tax and, if necessary, file the deferral request at least 90 days before departure.
• Report your new address to the tax authorities, your employer, your pension funds and your bank.
• Create your Finances publiques online account and keep a bank account in the SEPA area.
• List the income that will remain taxable in France: rents, public pensions, salaries for work in France.
• Count your days of presence in Andorra and keep the supporting documents, year after year.
• The following year: file in France on forms 2042, 2047 and 2042-NR, and in Andorra between 1 April and 30 September.

For the transfer of a business, see the full guide to relocating your business from France. To keep track of your days of presence from the moment you arrive:

Your days in Andorra

Count your days in Andorra over the year, against the 90-day and 183-day thresholds.

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