Exit Taxes by Country: What Leaving Really Costs 2026

You are considering a move abroad and have a rough departure date in mind. Then someone mentions exit taxes, and you realize leaving your current country might cost more than staying another year. For a lot of mobile earners, the tax bill for departing is the single most overlooked line in an otherwise careful relocation plan.

This guide explains what an exit tax is, and how the major countries treat it when you emigrate, so you know the price of leaving before you move to a country like Paraguay. Figures are approximate and current as of 2026; the rules are technical and change often, so treat this as a map, not a substitute for advice on your own situation.

The people this hits hardest are founders, investors, and anyone sitting on large unrealized gains. If your wealth is a salary and a modest portfolio, the cost of leaving is usually small. If you own a chunk of a company or a big appreciated position, it can be the biggest number in your whole move.

US citizens and green-card holders: The good news is that there is no US exit tax for merely moving abroad. The catch is bigger: citizenship-based taxation means you keep filing US returns on worldwide income wherever you live. The Section 877A exit tax applies only if you renounce citizenship as a "covered expatriate". See US citizens and Paraguay taxes for the detail.

What Exit Taxes Are and Why They Matter Before You Move

An exit tax, sometimes called a departure tax, is a charge some countries impose when you stop being a tax resident. The most common form treats you as if you sold your assets the day before you leave, then taxes the gain you never actually realized. Not every country has one, and the countries that do define the trigger and the scope very differently.

The logic is that a country wants to tax the gains that built up while you lived there, before you move somewhere it can no longer reach. So the question that matters for your plan is not only where you are going, but what your current country charges you on the way out. That cost lands once, at departure, and for the wrong asset mix it can be substantial.

It also explains a common confusion. People assume a 0% destination erases their tax problem, when in fact the destination and the departure are two entirely separate calculations. Paraguay decides what you pay going forward. Your former country decides what leaving costs. Both are separate questions, and both deserve an answer before you move.

Exit Taxes by Country: A Quick Comparison Table

Here is the shape of it across five major regimes, deliberately simplified. Every entry is a starting point to verify with an adviser, not a precise statement of the law, and the thresholds and reliefs behind each one are more detailed than a single cell can hold.

Two patterns emerge from the table. The residency-based countries split into deemed-sale regimes, such as Canada and Australia, and mostly no-exit-charge regimes like the UK. The United States is the outlier that taxes citizenship rather than residence, and much of continental Europe taxes departing owners of large shareholdings. The rest of this guide takes each in turn.

The United States: No Exit Tax for Simply Moving

If you hold a US passport or a green card, moving to Paraguay does not trigger an exit tax by itself. There is no deemed-sale charge for packing up and leaving. The trap is the opposite one: the United States taxes its citizens on worldwide income for life, regardless of where they live, so relocating does not switch off your US return at all.

The Section 877A exit tax is a separate event that applies only when you formally renounce citizenship, or a long-term green-card holder abandons the card, and you count as a "covered expatriate". Broadly, that means a high net worth, a high recent average US tax bill, or a failure to certify compliance. If it applies, the US treats you as selling everything the day before you expatriate and taxes the gain above an indexed exclusion.

So for Americans the honest framing is reversed. Paraguay's 0% removes the local tax, not the US tax, and the exit tax is only a renunciation question, not a moving question. The full picture, including the exclusions and the covered-expatriate thresholds, sits in the dedicated guide on US citizens and Paraguay taxes.

Canada's Departure Tax: A Deemed Sale When You Leave

Canada runs one of the clearest departure-tax regimes in the world. When you cease to be a Canadian tax resident, the Canada Revenue Agency treats you as having disposed of most of your property at fair market value on the day you leave, and taxes the resulting capital gain. You never sold anything, yet a real tax bill can appear on emigration.

Not everything is caught. Canadian real estate and certain registered accounts such as RRSPs are generally excluded from the deemed disposition, while investment portfolios, shares in private companies, and similar assets typically are not. Canada also lets you post security and defer the payment until you actually sell, which softens the cash-flow hit without removing the underlying liability.

For a Canadian weighing Paraguay, the departure tax is the first figure to establish with a Canadian adviser, because it can be substantial. The country-specific angle, including how a clean residency break works, is covered in Paraguay for Canadians.

Australia and CGT Event I1 on Ceasing Residency

Australia reaches a similar result through its capital-gains rules rather than a standalone departure tax. When you stop being an Australian tax resident, CGT event I1 is triggered: you are treated as having disposed of your assets that are not "taxable Australian property" at their market value, and the gain is taxable in that year. Australian real estate is generally taxed later instead, when it is actually sold.

There is an important choice built into the rules. For assets caught by event I1, you can elect to disregard the deemed disposal and instead keep them within the Australian CGT net until you genuinely sell them. That defers the tax, but it keeps those assets tied to Australia, which can complicate an otherwise clean exit. Which option applies to you depends on your portfolio and your gains, and a tax professional in your home country can assess it.

The practical upshot for Australians is that leaving is manageable but rarely free, and the election is a decision worth making with numbers in front of you. The mechanics and the residency-break questions specific to Australians are set out in Paraguay for Australians.

The UK: No General Exit Tax, but a Temporary-Non-Residence Trap

The United Kingdom is friendlier at the point of departure. It has no general exit tax on unrealized gains for individuals who leave, so becoming non-resident does not, by itself, trigger a deemed sale of your portfolio. In that narrow sense the UK looks like an easy country to walk away from without a departure charge.

The sting is delayed rather than absent. Under the temporary-non-residence rules, if you leave and then return within roughly five years, certain gains and income you realized while abroad can be pulled back and taxed as though you never left. The relief is genuine only if your move is truly long-term.

A second, longer tail runs through inheritance tax. Since 6 April 2025 the UK applies IHT on a residence basis rather than domicile: anyone UK-resident in at least 10 of the previous 20 tax years counts as a long-term resident, and that status outlasts departure by three to ten years, longer the more years you spent in Britain. Inside that window your worldwide estate, assets in Paraguay included, can still fall within UK inheritance tax.

This matters for anyone tempted to spend a short spell abroad purely to crystallize a large gain tax-free and then move home. That is precisely the maneuver these rules are designed to stop. If your relocation to Paraguay is a real, lasting move, the temporary-non-residence clock is less of a concern, but the length of your absence becomes a fact you need to plan around rather than improvise.

Germany and the EU: Exit Taxes on Company Shareholdings

Continental Europe adds a different flavor again. Germany's exit tax, under §6 of the AStG (the Foreign Tax Act), targets individuals who hold a substantial stake in a company, broadly 1% or more, when they give up German tax residency after at least seven years of unlimited German tax liability within the last twelve. On departure, the unrealized gain in those shares is taxed as if the shares had been sold.

The point to grasp is who it catches. A salaried employee or someone with a diversified portfolio usually walks past this rule untouched; it is aimed squarely at founders and significant shareholders whose wealth sits in company equity. For that profile, the charge on leaving can be very large relative to any annual saving.

Since 1 January 2022 Germany treats every departure alike. Whether you move to Austria or to Paraguay, the tax can be paid on application in seven annual instalments, usually against security; the old open-ended, interest-free deferral for moves within the EU is gone. Several other European states run comparable exit taxes on significant shareholdings, and their deferral terms differ from country to country. If you own a meaningful slice of a company anywhere in Europe, this is the clause to check long before you emigrate.

Weighing the cost of leaving? The departure figure has to come from an adviser qualified in the country you are leaving. Our part starts at the arrival: residency in Paraguay, the cédula and the RUC after it, planned around the exit date you settle on with them. Book an intro call

How Departure Rules Apply in Practice

If your country runs a deemed-sale regime, the size of the bill depends on your unrealized gains on the day you leave, so when you go and what you are holding at that moment matter enormously. How these rules apply to your own holdings is for a cross-border adviser to assess.

Structure matters just as much. Assets held through certain entities, pensions, or registered accounts may be excluded or treated differently under the home-country rules. The interaction between your home rules, any tax treaty, and the destination is exactly where the technical detail lives.

None of this is do-it-yourself territory. Two people leaving the same country on the same day can face very different bills purely because of how their assets are held and when they chose to move. That is why the exit calculation belongs with a cross-border adviser well before you book flights, not after.

Paraguay's Territorial 0%: The Destination, Not an Exit Tax

It helps to be clear about which side of the border does what. An exit tax is charged by the country you leave. Paraguay, the country you arrive in, does not impose one. Its appeal is a territorial system that, in principle, does not reach income sourced abroad, which is a destination-side benefit rather than an exit-tax question.

That is why the departure charge and the 0% are two separate sums that you add together, not one that cancels the other. Paraguay determines what you pay going forward: close to nothing on foreign investment income once you are a resident, though pay for work performed inside Paraguay may be treated as local, with 8 to 10% due on it. Your former country determines the one-time cost of leaving. How Paraguay's side actually works is set out in the 0% territorial tax residency guide.

When a move like this goes wrong on cost, the surprise almost always sits on the departure side, rarely in Paraguay. The 0% is the simple part. The cost of leaving is where the technical detail, and most of the money, actually sits, so it deserves the larger share of your planning time.

Frequently Asked Questions About Exit Taxes

What is an exit tax when you emigrate?

An exit tax is a charge some countries impose when you stop being a tax resident. The most common version treats you as selling your assets the day before you leave and taxes the unrealized gain. Not every country has one, and the trigger and scope vary widely, so verify your own country's rule.

Do US citizens pay an exit tax for moving to Paraguay?

No. There is no US exit tax for simply moving abroad. But citizenship-based taxation means US citizens and green-card holders keep filing on worldwide income wherever they live. The Section 877A exit tax applies only when a "covered expatriate" renounces citizenship. See US citizens and Paraguay taxes for the full detail.

How does Canada's departure tax work?

Canada's departure tax treats you as having disposed of most of your property at market value when you cease to be a tax resident, then taxes the capital gain. Real estate and RRSPs are generally excluded, while portfolios and private-company shares usually are not. You can post security to defer payment until an actual sale.

Does Australia charge exit taxes when you leave?

Broadly yes, through CGT event I1. Ceasing Australian residency triggers a deemed disposal of assets that are not taxable Australian property, at their market value. You can elect instead to keep those assets within the Australian CGT net and pay only when you genuinely sell, which defers the charge but delays a clean break.

Does the UK have an exit tax on unrealized gains?

Not a general one. Leaving the UK does not trigger a deemed sale of your portfolio. The catch is the temporary-non-residence rule: if you return within roughly five years, gains and income realized while abroad can be taxed as if you never left. Separately, long-term UK residents remain inside UK inheritance tax on their worldwide estate for between three and ten years once they have gone. The relief works only for genuinely long-term moves.

What triggers Germany's exit tax on company shares?

Germany's exit tax under §6 AStG targets individuals holding a substantial company stake, broadly 1% or more, who give up German tax residency after at least seven of the last twelve years of unlimited German tax liability. The unrealized gain in those shares is taxed on departure. Since 2022 the bill can be spread over seven annual instalments, usually against security, for a move anywhere, inside the EU or out of it.

Can exit tax payments be deferred?

Some regimes allow deferral within limits: several deemed-sale rules let you post security and defer payment until an actual sale. What works depends on your country, your assets, and any treaty, so model it with a cross-border adviser before you set a date.

Looking at the Paraguay side? Our packages handle the destination side, from documents and Migraciones appointments to the cédula, with the RUC inscription included in Premium. The home-side exit belongs with a qualified adviser in the country you leave. See the packages

Legal basis and disclaimer: This article is general information, not individual tax or legal advice, and residency and exit-tax rules differ by country and change. Comparative tax-policy data is published in the OECD Tax Database; confirm your own country's rules with its tax authority and a qualified cross-border adviser before you act. Compare our reading with PwC's country summary, which has no connection to us.