Foreign company owner of a building in France: what tax risks?

Holding a French building through a foreign company can meet a heritage, investment or international organization logic.

But since a French real estate asset is interposed in a foreign structure, several levels of analysis overlap: company taxation, income treatment, possible taxation of partners, specific obligations attached to French real estate and future consequences of the divestiture.

A foreign structure can create unexpected tax effects in France

The country of establishment of the company is not sufficient to determine its effectiveness.

It is necessary to examine its legal form, its tax classification, its level of substance, the applicable convention, the manner in which it holds the building and the treatment of flows distributed to the partners.

A coherent structure in its home state can thus produce a tax cost or exposure in France that had not been anticipated.

Risk must be measured throughout the period of detention

The analysis must not stop at rental income.

It is also necessary to anticipate the resale of the building or securities, a reorganization of the structure, a transmission, a change of residence of the partners or the evolution of the value of the French real estate.

The firm examines these different scenarios in order to identify vulnerabilities, restructuring margins and solutions to improve the overall tax efficiency of holding.

Master Edouard Pruvost specializes in consulting on international tax and real estate strategy. The firm intervenes on foreign structures holding real estate assets in France to analyse their risks, compare possible architectures and identify the most efficient solutions. To have your structure analysed and advice on tax strategy, contact the firm.