Exit taxes are usually described as taxes on the rich who leave. The name suggests a charge on departure and the thresholds suggest a charge on wealth. Read the statutes themselves, though, and a third element keeps appearing, more consistently than either. Almost every exit tax begins by counting years.
Spain counts ten of the last fifteen. France counts six of the last ten. Germany counts seven of the last twelve. The United States, for green card holders, counts eight of the last fifteen. Japan counts more than five of the last ten. Canada, which has no such condition, still carves out people who stayed five years or less out of the last ten.
The argument here is simple, and it follows from the texts: an exit tax is a tax on time. The asset thresholds decide how much is at stake. The years decide whether you are in the net at all. Anyone who thinks about exit taxes only in terms of wealth is looking at the wrong variable, because the one that matters most starts running on the day you arrive.
The Clock in the Statute
Here is how the main regimes define who is caught, taken from the legal texts.
| Country | Residence condition | Asset condition | Forgiveness on return |
|---|---|---|---|
| Spain | resident in at least 10 of the 15 tax periods before the last one | shares worth over €4 million, or a stake of over 25% in an entity where those shares are worth over €1 million | debt extinguished on return within 5 years, in qualifying cases |
| France | tax-domiciled in France for at least 6 of the 10 years before leaving | holdings of at least 50% of a company's profits, or over €800,000 | tax discharged after 2 years (5 years above €2.57 million) |
| Germany | taxable as a resident for at least 7 of the last 12 years | shares covered by the German rules on substantial holdings | no tax if a temporary absence ends with a return within 7 years, extendable to 12 |
| Japan | resident for more than 5 of the 10 years before leaving | covered assets worth ¥100 million or more | tax can be cancelled on return within 5 years (10 with an extended deferral) |
| United States | citizens always; green card holders in 8 of the last 15 years | net worth of $2 million, or average income tax above $211,000 (2026) | none |
| Canada | none, but assets brought in are exempt if resident for 60 months or less in the last 120 | all property, with exceptions | an election on return can unwind the charge for property held throughout, with no time limit |
| Belgium | none named by the finance ministry | financial assets, under the new capital gains tax | tax not due if assets are not sold within 2 years; deferral automatic for moves within the EU or EEA or to qualifying treaty partners, on request with a guarantee elsewhere |
The sources are the laws themselves: Article 95 bis of the Spanish income tax law, Article 167 bis of the French tax code, section 6 of Germany's Foreign Tax Act, the Japanese National Tax Agency's guidance on its departure tax, sections 877 and 877A of the US Internal Revenue Code, section 128.1 of Canada's Income Tax Act and the Belgian finance ministry's page on its new capital gains tax.
Put side by side, the pattern is hard to miss. Wealth thresholds vary enormously, from France's €800,000 to Spain's €4 million, and the Belgian ministry's description of its exit charge names no separate threshold at all. The residence clocks cluster tightly: five to ten years of residence within a window of ten to fifteen.
Why States Count Years
A state that taxes you on the way out is making a claim, and the claim needs a justification. The justification exit taxes rely on is accrual: the gain grew while you lived here, under our laws, protected by our courts, so part of it belongs to us even if you sell it elsewhere.
The residence clock is how the statutes turn that idea into a rule. A person who has lived in Spain for ten of fifteen years has, on the law's logic, accumulated most of their gains there. A person who arrived three years ago probably has not. Rather than tracing each gain back to where it arose, the law uses time as a proxy.
The clearest proof that this is the logic, not wealth, comes from the countries that do without a clock.
Canada taxes almost everyone who leaves on a deemed disposal of their property at market value. Yet it exempts, for people resident for no more than 60 months in the preceding 120, the property they already owned when they last became resident. The rule says in effect: we tax what grew here, and if you were not here long, what you brought with you did not grow here.
Belgium, in the finance ministry's description, sets no residence condition for its new exit tax, which arrived with its capital gains tax on 1 January 2026. But for assets acquired before 2026, the ministry explains, the starting value is the value on 31 December 2025, or the original cost where that is higher. Only gains that arose under the new regime are caught. Again, the claim is limited to the period in which the state says the gain was its business.
Spain adds a detail that makes the point almost explicit. Under paragraph 8 of Article 95 bis, for people who used the special regime for workers posted to Spain, the ten-year count only starts after that regime stops applying. Years spent under a regime that treated you as a quasi-foreigner do not count as years that build Spain's claim. The clock measures a relationship, not a stay.
The Return Clauses Tell the Other Half
If exit taxes were simply taxes on wealth, returning home would not matter. Your shares are worth the same whether you live in Madrid or Montevideo. Yet almost every regime with a clock also has a clause that forgives the tax if you come back.
In Spain, for temporary moves, whether for work or, to a country with a tax treaty that includes exchange of information, for any other reason, the tax can be deferred on request, and the debt is extinguished if you become resident again within five years without having sold the shares. For work-related moves, that period can be extended by up to five more years. Germany waives the tax if a temporary absence ends with a return within seven years, a period the tax office can extend by up to five more. Japan allows it to be cancelled on return within five years, or ten where the deferral has been extended. France discharges it automatically after two years if you still hold the shares, or after five above €2.57 million. Belgium's version is not due at all if the assets are not sold within two years of departure. Even Canada, which has no clock, lets a returning former resident elect under subsection 128.1(6) to unwind the deemed disposal of property held throughout the absence.
These clauses show what the tax is actually aimed at. It is not the act of leaving. It is leaving for good while holding appreciated assets, and then selling them where the old state cannot reach. A departure that turns out to be temporary is forgiven. A sale soon after departure is caught. The tax is a charge on the probability that the state's claim will be lost, and the years of residence are how the law decides the claim existed in the first place.
Frozen Numbers Widen the Net
There is a second way in which exit taxes are about time, and it is less visible. The asset thresholds are fixed in money, and money loses value.
Spain's €4 million threshold entered the law with Article 95 bis, which the consolidated text shows was added by Law 26/2014 with effect from 1 January 2015. The figure has not changed since. Every year of inflation and every rise in asset prices brings more residents across it without any vote on the matter.
The United States shows the same mechanism with unusual clarity, because it indexes one test and not the other. The income tax test in section 877 is adjusted for inflation every year: for 2026, the IRS's Revenue Procedure 2025-32 sets it at an average annual net income tax of more than $211,000 over five years, and the amount of deemed gain excluded under section 877A at $910,000. The net worth test, by contrast, is written into the statute as $2,000,000 or more, with no adjustment. As asset values rise, the unindexed test catches people the indexed one would not. The Brief's piece on citizen-based taxation explains why, for Americans, this matters even long after they have left.
France's €800,000 threshold, too, is a nominal figure. None of these laws needed to be tightened to reach more people. They only needed time to pass.
What Follows From This
If exit taxes are taxes on time, three conclusions follow for anyone who might one day move, and none of them depends on how wealthy you are today.
The clock starts when you arrive, not when you leave. The planning question for a new resident of Spain, France, Germany or Japan is not only what the tax rate is. It is how many years of residence the exit rules count, and what your assets are likely to be worth when that count is reached. A move that is meant to last five years is a different proposition from one that drifts into twelve.
Records of arrival are worth as much as records of departure. Rules that start from a value at a given date, or exempt what you brought with you, reward anyone who can prove what they owned and what it was worth when they became resident. Documentation assembled only at departure often comes too late for that purpose. The Brief's piece on the paper trail that saves you makes the case for keeping it from the first day.
A threshold far above you today may not be far above you in ten years. Fixed thresholds combined with rising asset values mean the question "am I rich enough to be caught?" has a different answer each year. A business that grows, a portfolio that compounds, or a property that appreciates can carry a household across a line that was never adjusted.
A Position
Seen this way, exit taxes are neither as outrageous as their critics say nor as exceptional as their defenders suggest. They are the logical end point of taxing people on residence rather than on citizenship: if the right to tax comes from living somewhere, the state's claim is tied to the years you lived there, and the exit tax is how that claim is settled before you go.
The strongest criticism is therefore not that exit taxes exist, but how some of them are built. A tax justified by accrual should tax only what accrued. Canada's 60-month rule and Belgium's 2025 step-up do that. A threshold justified by wealth should keep pace with the value of money. Most do not. The result is a tax that grows quietly with every year the rules go unchanged, falling on people who were never its target when the law was passed.
For readers of the Brief's longer survey of the tax on leaving and its detailed look at Spain's rules, the practical lesson is short: count your years. A country's exit tax is written into its law long before you think about leaving, and the only variable you control from the start is the calendar. The ten-year test was never only a question about lifestyle.
Work with Sebastian
Whether an exit tax could reach you depends on your years of residence, your assets and the rules of each country involved, on both ends of a move. That calculation is best done before the clock runs out. Book a consultation.
