Imagine that you decide to move to Portugal to enjoy its favorable tax regime as a digital nomad, or move your residence to Dubai to take advantage of their 0% income TAX. Seems a perfect plan, but did you know that Spain may charge you a tax on the profit of your business or investment, even if not yet sold?
This is the Exit Taxa tax controversial that it is giving a lot to talk about in 2025. If you are a businessman, an investor or a digital nomad, this topic affects you directly. In this article, we break down what is the Exit Taxis , who it impacts, how it works and, more importantly, how you can plan to minimize their impact. I keep reading in order to protect your equity and make informed decisions!
What is the Exit Tax and why does it exist?
The Exit Tax, or departure tax, is a mechanism prosecutor introduced in the Law on Income Tax of Natural Persons (personal income TAX) in Spain (article 95 bis). Your goal is to tax the latent capital gains (unrealized gains) of assets such as stocks, shares in companies or criptomonedas when a person transfers its tax residence outside of Spain. In other words, if you have a startup valued at 1 million euros, and you're moving to another country, the Treasury may require you to pay tax as if you had sold that company, even if you have not received a single euro.
Why is there?
Spain seeks to prevent taxpayers from transferring their residence to countries with low taxation (such as Cyprus or Malta) to evade taxes on profits accumulated over the years in Spanish territory. However, this measure has generated criticism for being considered a barrier to freedom of movement, especially in a globalized world where entrepreneurs and nomads digital change country frequently.
Important information: In 2025, the Exit Tax is at the center of debate due to the fiscal pressure on record in Spain (up to 65% of the income of certain taxpayers, according to estimates), and a file opened by the European Union, which raises the question if this tax violates the principle of the freedom of establishment in the EU.
Who is affected by the Exit Tax?
Not all who moved into Spain must pay the Exit Tax, but certain profiles are most vulnerable:
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Entrepreneurs and investors:
If you own more than 25% of a company not listed or assets with a market value of more than 4 million euros, you are on the radar of the Exit Tax.
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Nomads digital investments:
If you have criptomonedas, stocks or shares accumulated in Spain and you change your residence, you may be faced with this tax.
Case studies:
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Mary, entrepreneurial: Mary founded a startup in Madrid, valued at 2 million euros. When he moved to Lisbon to benefit from the regime of Residents Not Common (20% of income TAX), Irs requires you to pay tax on € 500,000 of capital gains are not made, even though it has not sold his company.
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Carlos, an investor in crypto: Carlos, a digital nomad, he moved his residence to Dubai. Their criptomonedas, bought for € 100,000 and is now valued at 600,000 euros, generating an Exit Tax of € 120,000 (24% on unrealised gains).
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Note: Transfers within the EU or the European Economic area (EEA) with the exchange of tax information can defer the payment of the Exit Tax, but does not allow him to escape.
How does the Exit Tax? Technical aspects
Understand how to calculate the Exit Tax is key to plan your tax strategy. Here are the details:
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Tax Base:
It is calculated by subtracting the acquisition value of the assets (what you paid for them) to the market value at the time of the transfer. For example, if you purchased stock for 200,000 euros and now are worth 1 million, the surplus-value dormant is 800,000 euros.
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Tax rate:
In 2025, the capital gains are taxed according to the sections of the income TAX, which can reach up to 27% for high income. In the case of non-residents, the Tax on the Income of Non-Residents (IRNRproductive: Exemptions and deferrals: If you move to a country of the EU/EEA with the exchange of information, you can request a deferment of payment until you sell the assets. However, this requires collateral (such as bank guarantees), which can be costly and complex.
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Double Taxation conventions (DTCS):
Spain has agreements with over 100 countries to avoid double taxation. These conventions determine whether capital gains should be taxed in Spain or in the country of destination, but the Exit Tax is generally prevail if the earnings were generated in Spain.
Practical example: If you have holdings valued at 5 million euros (acquired by 1 million), the Exit Tax would apply to about 4 million of gains, generating a tax of up to 1.080.000 € (27%). An amount that can be devastating if you don't have liquidity to pay for it.
Do tax justice or hindrance to mobility?
The Exit Tax has unleashed a firestorm of opinions in Spain:
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To please: The treasury argues that this tax protects the tax base of the country, avoiding that taxpayers to transfer assets to tax havens for tax avoidance. In a context where the tax burden is high (the Spanish working up to 177 days in the year to pay taxes, according to the Instituto Juan de Mariana), the Exit Tax is presented as a tool to ensure fairness in taxation.
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Against: Critics, including entrepreneurs and associations such as the business Circle, the qualify of "terrorism prosecutor." They argue that penalizes the success of the business and acts as a disincentive to investment in Spain, especially at a time when countries such as Portugal (20% income TAX for nomads digital), Cyprus (12.5% corporate tax) or Dubai (0% income TAX) offer schemes more attractive. In addition, the EU has questioned if the Exit Tax violates the principle of the freedom of establishment, a key principle of the european single market.
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International perspective: Countries such as Germany and France have similar taxes, but with thresholds and more flexible conditions. Germany, for example, allows automatic stays within the EU without any additional guarantees, which reduces the administrative burden.
Strategies to minimize the impact of the Exit Tax
The good news is that with proper planning, you can reduce the impact of the Exit Tax. Here are some strategies:
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Plan your transfer:
Change your tax residency before your assets accumulate large capital gains. For example, if your company still has a modest value, moving to another country can minimize the tax base.
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Structure your assets:
Consider creating a holding company in a country with a CDI favorable (such as the Netherlands or Luxembourg) to manage your entries, which you can defer or reduce the payment of the tax.
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Take advantage of the postponement:
If you're moving to a country of the EU/EEA countries, applying for a deferment of payment until the actual sale of the assets. This is required to meet stringent requirements, such as to submit a bank guarantee.
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Professional advice:
A boutique legal and tax specialist can analyze your case, review CDI applicable, and design a customized strategy to protect your assets.
Real case: In 2024, a Spanish entrepreneur he moved his residence to Malta before you sell your company for 10 million euros. With proper planning, structured its assets through a holding company, maltese, significantly reducing their tax burden in comparison with a transfer without planning.
Plan today to protect your future
The Exit Tax is a reminder that, in a globalized world, mobility has a price. Although your aim is to combat tax evasion, your design may be seen as a disincentive for entrepreneurs and nomads digital that they seek to optimize their taxation in countries that are more competitive. In 2025, with the fiscal pressure on the rise and the scrutiny of the EU on the Spanish regulations, to understand and plan in front of the Exit Tax is more important than ever.
In IURITwe are specialized in international taxation and estate planning. If you're thinking about moving your residence or want to protect your assets, contact us today for a personalized consultation. Don't let the Exit Tax would dampen your plans of global expansion!
Are you ready to take control of your fiscal future? Write to us at info@iuritcorp.com or visit book your tax consultancy to schedule a consultation.
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