International taxation of ICS: IRS or IS regime, what to choose?

International challenges traditional criteria of choice

In the presence of international investment, the choice between income tax and corporate tax cannot be made solely in the context of French taxation. The consequences of an SCI vary depending on the fiscal residence of the partners, the location of the buildings, the applicable tax treaties and the qualification chosen by the States concerned.

A scheme with an advantage in France can thus produce substantially different effects abroad, whether it concerns taxation of income, deductibility of charges, capital gains or the manner in which assets are transferred. Consistency of the structure therefore requires an analysis beyond the borders of a single tax system.

ICS in an International Heritage Strategy

The system of taxation of an CIS is only one part of a broader heritage organization. Its relationship with other family group companies, foreign structures, investment financing arrangements or the mobility prospects of partners must be examined before any decision is taken.

This approach leads to an appreciation of the SCI not as an autonomous vehicle, but as an instrument for an international heritage strategy, whose effectiveness depends on all the possible fiscal interactions between the different jurisdictions concerned.

A prospective analysis rather than immediate arbitration

The choice between IR and IS produces effects that extend well beyond the creation of society. Future investments, expatriation, disposal of an asset, family reorganization or the evolution of tax treaties can change the initial balance of the structure.

The relevance of a tax system is therefore not only appreciated at the time of the creation of the ICS. It is the result of forward-looking thinking, integrating the long-term heritage objectives, the operations envisaged and the international issues specific to each situation.

Expertise in international heritage structure

The firm works with investors, executives and international families to structure their cross-border real estate investments. Its expertise combines real estate taxation, international taxation and property engineering in order to design structures adapted to the assets held in France and abroad and to secure the tax consequences in a constantly changing international environment.