Real estate tax representative

Foreign SCI and Foreign Company Owning Property in France: Is Fiscal Representation Required?

A foreign real estate holding company (SCI) or other legal entity owning property in France faces complex tax obligations. Here is what you need to know about fiscal representation, corporate tax, and mandatory filings.

When is fiscal representation mandatory for a foreign company?

For legal entities (companies, SCIs, holding companies, investment funds), the need to appoint an accredited tax representative depends primarily on two criteria: the country in which the company is established and the nature of the transactions carried out in France.

A company established outside the European Union that sells a property in France is subject to the same regime as non-resident individuals. If the sale price exceeds €150,000 (or if the company is not established in the EU/EEA), an accredited tax representative must be appointed to calculate and remit the capital gains tax at the time of the sale.

EU vs non-EU: a fundamental distinction Companies established in the European Union or the EEA are generally not required to appoint an accredited tax representative for real estate transactions. However, any company outside the EU/EEA is subject to this obligation as soon as the capital gain or sale price exceeds the legal thresholds.

Tax obligations of a foreign company owning property in France

Holding a property in France through a foreign company generates several annual tax obligations, separate from those arising from a potential sale:

  • Property income or corporate tax (IS) filing: if the property is rented out, the rent received is taxable in France. The company files a declaration with the Foreign Companies Tax Office (SIEE — Service des Impôts des Entreprises Étrangères).
  • IFI (Real Estate Wealth Tax): if the net value of French real estate assets held by the company exceeds €1.3 million, IFI may be due by the individual shareholders residing in France or holding more than 10% of the share capital.
  • Annual declaration of shareholders: certain structures are required to annually declare the list of their shareholders (form 2746), notably to avoid the application of the 3% tax.

The 3% tax on the market value of properties

Article 990 D of the French General Tax Code (CGI) provides for an annual tax of 3% on the market value of French properties held by legal entities. This tax is designed to discourage opaque offshore arrangements used to hold real estate in France without fiscal transparency.

The following are notably exempt from this tax:

  • Companies established in the EU, subject to filing conditions
  • Companies established in a country linked to France by a tax treaty containing an administrative assistance clause
  • Companies that annually declare their shareholders and the value of their properties
  • Collective investment schemes (OPCI, SCPI) subject to conditions
Practical example A holding company registered in the Cayman Islands owns an apartment in Nice worth €800,000. In the absence of a tax treaty and without filing an annual declaration, it owes €24,000 in 3% tax per year (3% × €800,000), in addition to any other taxes on potential rental income.

Practical steps and role of the tax representative

Given the complexity of the tax obligations facing foreign companies owning property in France, using a professional is almost unavoidable. An accredited tax representative or a chartered accountant specialising in this area can handle:

  • Filing annual declarations (2746, 2065 or 2072)
  • Calculating and paying corporate tax (IS) on French rental income
  • Managing the 3% tax and implementing applicable exemptions
  • Representation in a real estate sale (calculating and remitting capital gains tax)

To find a qualified professional with expertise in foreign corporate structures, consult our list of DGFiP-accredited tax representatives. Some specialise in foreign legal entities and complex ownership structures.

Risk of double taxation without a treaty In the absence of a tax treaty between the country in which the company is established and France, French real estate income may be taxed in both countries with no mechanism to eliminate double taxation. Always check the applicable treaty before structuring your investment.

Frequently asked questions

Since Luxembourg is an EU member state, a Luxembourg SCI is not required to appoint an accredited tax representative under Article 244 bis A of the French General Tax Code (CGI). However, it must still fulfil its filing obligations in France (results declaration, IFI if applicable) and may appoint a tax agent to assist with this.
Yes. Legal entities not established in the EU/EEA that own property in France are in principle subject to the annual 3% tax on the market value of the properties (Article 990 D of the CGI), unless a tax treaty or exemption applies. Failure to pay exposes the entity to significant penalties.
Foreign companies (including equivalent SCIs) owning properties in France are generally subject to corporate tax (IS) on their French rental income if they are fiscally opaque. If they are transparent (like a French SCI taxed as a partnership), their shareholders are taxed individually on their share of the French income.
The foreign SCI must file a results declaration (form 2065 for corporate tax entities, or form 2072 for transparent structures equivalent to a French partnership SCI) with the Foreign Companies Tax Office (SIEE) in Noisy-le-Grand. A tax representative or agent is strongly recommended for these complex procedures.
Official sources: impots.gouv.fr — BOFiP — foreign legal entities — Légifrance — CGI art. 990 D and 244 bis A

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