European Nations Impose Stricter Exit Taxes to Stem Wealth Flight
BRUSSELS / THE HAGUE / MADRID / BERLIN / OSLO, July 28, 2025 – Confronted with a growing exodus of high‑net‑worth individuals, several European governments have rolled out or tightened “exit taxes” this year—levies on unrealized capital gains triggered when wealthy residents relocate abroad—in a bid to shore up public coffers and discourage emigration of affluent taxpayers.
Early in 2025, the Netherlands formalized its exit‑tax regime, targeting so‑called “substantial interests” (typically ownership of at least 5 percent in a company). Under the new rules, departing residents must pay personal‑income‑tax rates on unrealized gains accrued while they were Dutch taxpayers—24.5 percent on gains up to €67,000 and 31 percent above that threshold—thereby eliminating the longstanding ability to defer tax until an eventual sale of shares (expatmoney.com).
Spain, which already taxes wealth above €3 million under its Solidarity Tax on Large Fortunes, now applies an exit levy to unrealized capital gains on shareholdings when a taxpayer moves overseas—provided they have been tax residents for 10 of the prior 15 years and hold shares worth more than €4 million, or at least 25 percent of a company valued at over €1 million. The gain is taxed at savings‑income rates, currently up to 23 percent (globalcitizensolutions.com).
In Germany, the Annual Tax Act 2024 extended exit taxation—previously confined to corporate share stakes—to include investment‑fund units effective January 1, 2025. Now, individuals holding at least 1 percent of fund shares (or with acquisition costs above €500,000) face immediate tax on their hidden reserves when they surrender German tax residency. Losses may not offset this “dry income,” and deferred‑payment options require collateral and interest‑free installments over seven years (ecovis.com, noerr.com).
Norway also revamped its exit‑tax framework in the 2025 budget, imposing levies on unrealized gains exceeding NOK 3 million (about $280,000) for those emigrating, with a 12‑year window to settle the tax—even if the assets remain unsold. Taxpayers can defer payment under strict conditions, but the reforms mark a sharp turn toward capturing value built under the Norwegian tax system (bankfrogs.com).
Proponents argue these measures protect national revenues against a tide of wealthy departures—particularly to low‑tax havens such as the UAE and Switzerland—which Henley & Partners forecasts will attract nearly 10,000 new millionaires this year alone. Critics, however, warn that steep exit costs may backfire by accelerating relocations or discouraging inward investment, and they call for a coordinated EU‑wide approach to avoid jurisdictional arbitrage.
As European capitals weigh further fiscal tightening to meet post‑pandemic spending needs, exit taxes will remain a flashpoint in the broader debate over wealth inequality, mobility rights, and the competitiveness of Western economies in an era of globalized capital flows.
