Companies whose annual turnover does not exceed certain thresholds are entitled to the exemption which exempts them from the payment of this tax. If the property is owned by a French transparent entity, the shareholders will be taxed on their personal income. Here is the main information that must appear on the invoices.

The main cases of exemption are as follows: Transactions exempted under domestic regime, this mainly concerns: Exemptions tending to avoid double taxation (transactions subject to registration fees, gambling taxes, etc. Below is an overview of applicable rates of corporate income tax for the coming fiscal years as resulting from the French Finance Law for 2018.

​​​​​​​Companies under the real normal regime and which make a monthly or quarterly VAT return can request a refund of their VAT credit if it exceeds € 760. What taxes are payable in relation to the purchase of real estate via the various types of corporate vehicle available and who is responsible for the payment of these taxes?

Taxes and duties with the exception of VAT itself; Costs incidental to deliveries or services (commissions, packaging costs, transport, insurance, etc.). The VAT tax regime complies with EU directives. French Financial Transaction Tax Are You Prepared? Under certain conditions, the same rules apply (including the application of double tax treaty) to the shareholders of tax transparent partnerships. However, these contractors may opt for VAT.

Which constitute a supply of goods, a supply of services or an intra-Community acquisition; Are carried out by persons liable to VAT; Constitute an independent and usual economic activity. VAT can be recovered by offset against the VAT collected on the VATable activity or by claiming a reimbursement of VAT credit to the public Treasury.

The main cases of exemption are as follows: The tax base is made up, for the supply of goods, the provision of services and intra-Community acquisitions, by all the sums, securities, goods or services received or to be received by the supplier or the service provider in return for these transactions, from the part of the buyer or a third party, including subsidies directly linked to the price of these operations. Carry forward the VAT credit to the following tax periods; Request reimbursement of all or part of the VAT credit on condition that certain thresholds are respected. A reduced rate of 0.71498% applies if an undertaking to re-sell the land within five years is made by the buyer. The FTT will be due irrespective of whether the acquisition is carried out by a company or an individual.

Under the French participation exemption regime, 95% (99% in certain circumstances) of the dividend is tax-exempt. It is not allowed as a deduction in computing rental income because it is deemed to be part of the acquisition cost of the land (neither deductible nor depreciable). Must be subject to this tax transactions: However, certain transactions which fall within the scope of VAT are exempt.

Unless otherwise provided by law (exports for example), the exemption entails the loss of the right to deduct the tax which encumbered the elements of the price of the transaction carried out. If property is owned directly by a French corporation, income will be subject to corporate tax in France at the normal rate of 31% in the hands of the French corporation on top of which miscellaneous contributions are added. The company then has a tax claim on the Treasury.

ll products or services that are not regulated by specific VAT rates are affected by this rate. Please note that the French Finance Law for 2018 has created two exceptional contributions which will be levied on fiscal years ending from 31 December 2017 until 30 December 2018. The Finance Act 2018 also lays down special deduction rules for "in fine" loans designed to take account of theoretical amortisation. The sale of shares in a company holding real estate (where the value of the real estate represents more than 50% of the company’s assets) is subject to a transfer tax of 5% of the price paid for the shares or the fair market value if higher.

Foreign owners are generally subject to French tax on rental income (i) under the individual income tax regime at a progressive rate ranging from a minimum of 20% up to 45% (increased by additional contributions), or (ii) under the corporate income tax regime at the standard rate of 31% (increased by additional contribution) (the effective tax rate is 32.02% for corporate taxpayers whose turnover exceeds €7,630,000). This tax applies indifferently on real estate rights or assets, other than building lands. On 1 August 2012, France introduced a financial transaction tax in French tax regulation pursuant to Article 5 of the French Amended Finance Bill of 14 March 2012. Regarding transfers of real estate assets located in France, a 5.09% rate duty is applied, plus notaries' fees and a 0.1% specific duty (land registry fee). 14 August 2012 Purchases linked to an issue of securities (primary market) 2. Exemptions tending to avoid double taxation (transactions subject to registration fees, gambling taxes, etc. On the other hand, when carrying out an economic activity in France, it is important to know the main rules specific to the country. There are therefore two options available to the company: Companies under the actual normal tax regime must have their intra-community VAT number, donwload and complete the special form n°3519-SD and attach it to the VAT return n°3310. Transactions involving new buildings for VAT purposes (ie a building is considered as "new" for VAT purposes when it is acquired less than five years after its completion from a VAT-liable acting as such.

The companies covered by this scheme must pay two installments during the year, a first installment in July representing 55% of the VAT due for the previous year before deduction of VAT on fixed assets, and a second in December representing 40%. Dividends can be expected from real estate ownership through a company. The Second Amended Finance Bill shall be published shortly. 3% for the portion of the sale price up to EUR200,000 after the application of a rebate of EUR23,000. Intra-group transactions and restructuring transactions Certain exemptions are applicable to intra-group transactions such as those between companies that are members of the same group within the meaning of art.L.233-3 of the French commercial code (i.e.

Purchases linked to market making activities 4.

The third element of the French FTT is a 0.01% tax on high frequency trading (" This is payable by the occupier of the property (as of 1 January)[1]. An anti-abuse clause is also provided for the deduction of intra-group loans limiting the deduction of the debt, except in the event that the borrower is able to justify the normal nature of the loan terms and conditions (i.e.ie on an arm's length basis), in particular compliance with due dates, the amount and the actual effectiveness of repayments.

Unless the participation exemption on dividends applies, dividends arising in France paid to corporate shareholders are included in taxable income for corporate income tax purposes. The method for self-liquidation is identical to that described for intra-community acquisitions. Tax on real estate capital gains made in the United Kingdom by a French resident, V.A.T: The reform of the distance selling regime, Assistance for the hiring of young people under 26 years of age. The tax does not apply to premises which are subject to local tax on business activities (with exceptions). Companies whose turnover in the previous year exceeds € 818 000 for sales activities or € 247 000 for service providers are compulsorily subject to this regime. VAT identification number of the seller or service provider as well as the customer for intra-Community supplies or services; Detailed information for each delivered good or service rendered (quantity, denomination, unit price); Date on which the delivery of goods or the provision of services are made when it differs from that of the invoice (or the date of payment of a deposit); Total amount excluding taxes and amount of tax payable by tax rate; In case of exemption, the references of the legal text which provides for this exemption; The words "auto-liquidation" when the purchaser or customer is liable for VAT.

IFI is assessed on the real estate owned by the taxpayer to the extent that the value of the taxpayer's real estate net assets exceeds €1.3m. A €125 registration duty applies if the buyer intends to erect a building on the land, provided that the buyer undertakes to complete the construction works within four years and complies with the undertaking. Subject to certain conditions, the withholding tax is reduced to nil for dividends paid by a French resident company to a qualifying EU parent company if the parent company holds at least a 10% participation in the French subsidiary for at least two years (or 5% when the EU parent company cannot offset the withholding tax in its country of residency).

Transactions involving developable land are subject to VAT on the total price where VAT on the acquisition cost was deducted when the land was acquired by the seller and are subject to transfer tax at a rate of 0.71498 % (or a fixed fee of €125 if the buyer intends to erect a building on the land, provided that the buyer undertakes to complete the construction works within four years and complies with the undertaking). Companies which do not qualify as French real estate companies (ie companies where the value of French real estate assets represent less than 50% of their total French assets). Sales activities and provision of accommodation: € 85,800 for year N-1 or € 94,300 if turnover N-2 does not exceed € 85,800; Service provision activities: € 34,400 in year N-1 or € 36,500 if turnover N-2 does not exceed € 34,400. This is an updated version of our alert issued on 28 June 2012. There is a specific tax for development of office premises in Paris area whose rates vary from €0 to €431 per square metre depending on the district the office is located in. Dividends are subject to a progressive scale of income tax, after a flat-rate reduction of 40% has been applied when possible. It is therefore extremely important to discuss with an English-speaking accountant who may be able eventually to opt for a VAT tax regime.

This scheme applies to companies whose annual turnover ranges from € 85 800 to € 818 000 for sales activities and from € 34 400 to € 247 000 for service activities. However, the seller is jointly liable for the payment of these costs. Transactions involving non-developable land are exempt from VAT (unless an election for VAT to be payable is filed in which case the VAT is due on the total purchase price) and are subject to transfer tax at a rate between 5.09006% and 6.40665% , depending on the type and location of the land. AT is taxable in France only if the provider is established in France or has an establishment or its domicile in France (except distance selling).