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 30 April 2019

Regime governing property traders: the Cour de Cassation challenges the possibility to avoid payments of registration fees for operations in the past that partially complied with an undertaking to resell

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FUNDAMENTALS


RENTALS

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gestion

Real estate taxation, investment assets: rentals

> Introduction
>VAT - CRL

> Profits tax
> Local taxation
> Tax audit


ACQUISITION/DISPOSAL

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acquisitions

Tax aspects of acquisitions/disposals of real estate asset

Introduction
> Real estate asset
Real estate investment company
Leasing


DEVELOPMENT

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Taxation of real estate asset, as a part of stock

> Introduction
Development operations

> Acquisition and resale
Profits tax

 


STRUCTURATION

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Tax aspects of the legal methods oh holding investments

Introduction
Unregulated structures 

Regulated structures 


INDIVIDUALS

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Taxation of the real estate assets of private individuals

> Introduction
> Rental income
Capital gains on real estate
Furnished rentals
Real property wealth tax
Gifts / Inheritances
Subdivision


INTERNATIONAL

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Internatial investments: French tax aspects

Introduction
> Institutional investors / Companies
> Private individuals

TAX AUDIT
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Tax audit


Levy on rental income (CRL)

Published on .

Levy on rental income (CRL)

This is the former tax on rents ("taxe additionelle sur les loyers"). 

It is set out in articles 234 nonies and seq. of the FTC. 

Conditions of application

Real estate assets concerned:

  • were completed 15 or more years ago
  • do not give rise to rents subject to VAT; and
  • are in the possession of:
    • - legal persons subject to corporation tax (CT) directly or via partnerships that are themselves not subject to CT (in this case it suffices that one of the partners is subject to CT for CRL to be applicable), or
    • - not-for-profit organisations.

Exemptions:

  • Sub-letting,
  • Rental of non-built premises,
  • Annual rental of less than €1,830 / premises,
  • Lease granted to the state or to certain public institutions,
  • Rental of buildings belonging to the state or to certain public entities,
  • etc... 

Tax base:

  • Net income with the meaning of income from land (as regards turnover and collection). 

Taxation period:

  • Annual (or per financial year). 

Payment:

  • CRL is payable with the balance of CT for CT-liable companies (15 April of N+1 if financial year ends on 31 December), or when filing the results statement for other taxpayers, with, a single provisional prepayment mechanism if applicable (the provisional prepayment is levied at 2.5% of the profits taxable to the CRL of the previous year).
  • For buildings used for commercial and business purposes CRL may or may not be rebilled to the tenant according to the provisions of the lease.

 

reminder

If a building rental is subject to VAT (obligatory or optional), no CRL is due. However, CRL is always a cost, whereas VAT is only a cost when not fully deductible by the tenant.