Taxes in France

TAXES IN FRANCE: (REAL ESTATE PROPERTY)

Double Taxation Avoidance Agreement as to taxes for income and capital was signed on November 26, 1996 in Paris between the government of the French Republic and the government of the Russian Federation.
This convention came into force on February 9, 1999.

1. Capital gains tax - ‘taxe sur la plus value’ (upon sale of real estate property)
Income from the capital gains of individuals or companies in accordance with Art. 8 – 8-ter of the General Tax Code (CGI) in case of a transfer of newly built or unfinished real estate units or the title to such real estate property shall be subject to taxation as per the provisions of Art. 150-U of the General Tax Code (CGI). As each real estate unit is a unique one, a taxation study shall be conducted prior to making an investment.
This distribution is a system of real estate increment value which takes place as a result of sale.

After this, the following issues shall be considered:

а. - Scope of application of real estate increment value

(see Section 1, Official Bulletin for State Finance – Taxes, Income from Immovable Property and Profit from Immovable Property, Real Estate Increment Value – 10 (BOI-RFPI-PVI-10) );

b. - Taxation of real estate increment value

(see Section 2, Official Bulletin for State Finance – Taxes, Income from Immovable Property and Profit from Immovable Property, Real Estate Increment Value – 20 (BOI-RFPI-PVI-20));

с. - Arrangement of taxation,

as well as the requirements for filing declarations and for payment in the field of real estate increment value
(see Section 3, Official Bulletin for State Finance – Taxes, Income from Immovable Property and Profit from Immovable Property, Real Estate Increment Value – 30 (BOI-RFPI-PVI-30)).

d. System of real estate increment value 

foreseen by Art. 244-bis A of the General Tax Code (CGI) is reviewed in the Official Bulletin for State Finance – Taxes, Income from Immovable Property and Profit from Immovable Property, Real Estate Increment Value – NR (BOI-RFPI-PVINR).
 

2. Taxes for real estate:

‘Real estate taxes’ are direct annual taxes collected by the state in favor of local communities (regions, departments, municipalities), as well as state institution for inter-municipal cooperation.
The local taxation system is characterized by the fact that the tax base of the local taxes essentially consists of a cadastral lease cost which is a theoretical profitability of the property defined by the administration.

 

The local taxation system consists of four main taxes:

a. – Residence tax - la taxe d'habitation,

collected from any person which, in accordance with any title or reason, disposes of or uses furnished residential premises (Art. 1407 and 1408 of CGI);

b. – property tax on undeveloped property - la taxe foncière sur les propriétés bâties,

defined annually in relation to the buildings located in France, except for those which are permanently exempted from taxation (state property, rural buildings of agricultural nature etc.) or which are temporarily exempted from taxation (in favor of new or innovation companies or companies intended to facilitate the development of real estate within the town planning policy and territorial planning) (Art. 1382 and 1387 of the General Tax Code (CGI));

с. - property tax on non-constructed property - la taxe foncière sur les propriétés non bâties,

defined annually in relation to the title to all kinds of undeveloped land located in France, except for those which are permanently exempted from taxation  (state property) or which are temporarily exempted from taxation  (different incentives for organic ecological agriculture, forest restoration or preservation of the regions having ecological interest)  (Art. 1383 of the General Tax Code (CGI));

d. - local economic contribution - la contribution économique territoriale,

consisting of two parts, namely: the corporate property tax  (CFE) calculated on the basis of the cost of company’s real estate, and the company value-added contribution (CVAE) calculated depending on the added value made by the company  (Art. 1447-0 of the General Tax Code (CGI));

3. PAT – Property tax:

l'impôt de solidarité sur la fortune (ISF)
 The property tax applies to certain real estate units owned as of the relevant date. The following taxes are reviewed in this section:

а. – annual tax - la taxe annuelle,

in the amount of 3 % of the market value of the immovable property located in France and owned by legal persons: Art. 990-D, Art. 990-E, Art. 990-F, Art. 990-G and Art. 990-І of the General Tax Code (CGI)).

b. – solidarity tax on wealth - l'impôt de solidarité sur la fortune (ISF):

Art. 885-А and the following ones of the General Tax Code (CGI);