Real estate investment companies (SCI) and furnished rentals: the 10 % threshold and corporation tax

A French real estate civil partnership (SCI) is subject to income tax by default. When it rents out furnished properties, its activity can be considered commercial. According to economie.gouv.fr, if this activity is not ancillary, meaning it exceeds 10% of the company's turnover excluding VAT, the SCI is subject to corporate income tax (IS). The BOFiP (French tax authority's official bulletin) refers to total revenue excluding VAT: the basis for this threshold is detailed below. The tax authorities also specify that an SCI that owns furnished accommodation must file form 2065.

This page presents what official sources say about the 10 % threshold, corporate income tax (IS), the declaration, and the option for IS. It does not compare personal income tax (IR) and corporate income tax (IS) for your project and does not advise on which option to choose.

By default, the SCI is subject to income tax

According to service-public.gouv.fr, a French real estate investment company (SCI) is subject to income tax by default. The partners are taxed on their share of the profits, even if the company does not distribute any profits to them.

The 10 % threshold: official formulations that differ

The official sources I read refer to 10 %, using different words.

• service-public.gouv.fr (fact sheet on SCI, verified on 07/10/2025). Beyond 10% of turnover excluding taxes, commercial activity is no longer considered secondary. Furnished rentals are included as an example of commercial activity.
• economie.gouv.fr (page written on 21/10/2025). A French real estate company (SCI) that rents out furnished properties is engaged in an activity that can be considered commercial. If this activity is not ancillary, meaning it exceeds 10% of the company's turnover excluding VAT, the SCI is subject to corporate income tax (IS). The SCI's rental income remains subject to personal income tax (IR), and each partner must declare it.
• impots.gouv.fr (page «Les SCI», modified on 19/09/2016). A French real estate company (SCI) engaged in industrial and commercial activity is subject to corporate income tax (IS). The page mentions an exception: SCIs whose commercial revenue does not exceed 10% of their total revenue are not subject to IS. It refers to BOI-IS-CHAMP-10-30.
• BOFiP BOI-IS-CHAMP-10-30 (version in force since 04/07/2018). In paragraph 320, the civil law companies concerned are not subject to corporate income tax as long as the amount of their commercial revenue, excluding VAT, "does not exceed 10% of their total revenue, excluding VAT." In paragraph 330, in the event of an occasional overrun, the tolerance is assessed based on the average of the year in question and the three preceding years.

The formulas used differing bases for calculation: turnover excluding VAT on one hand (economie.gouv.fr, service-public.gouv.fr), and total revenue excluding VAT on the other (page "Les SCI", BOFiP). This contradiction between official sources is not resolved here: the applicable basis should be verified with the tax authorities. The sources consulted also do not specify whether corporate income tax applies only to furnished rentals or to all rental income of the SCI. This point should be verified with the tax authorities or your advisor before taking any action.

What the administration says about a property company that owns furnished accommodation

The FAQ on impots.gouv.fr dedicated to this case indicates that a SCI (Société Civile Immobilière) owning furnished premises must declare it as a commercial activity. It pays corporation tax on the rents received, after deducting expenses related to the rental.

Three consequences are listed in the pages read.

• Statement. The SCI files a declaration no. 2065. The page "SCIs" specifies: declaration 2065 and not 2072. The page "Real estate civil company" indicates that the 2072-S applies when the partners are individuals and that real estate companies file electronically the 2072-S or 2072-C.
• Partners. The partner does not directly declare their share of the rent. They declare the amounts distributed to them, in the category of investment income, on form 2042.
• Accounting. The page links to the Commercial Code, the CGI and the general accounting plan.

The details of forms 2072-S and 2072-C are available on our page about SCI declarations.

The option for IS

A French real estate investment company (SCI) taxed under the personal income tax (IR) regime can also opt for corporate income tax (IS). According to service-public.gouv.fr, an SCI opting for IS must notify its choice before the end of the third month of the fiscal year to which it relates. The option can be revoked up to the fifth fiscal year following the one to which it was applied.

This page does not describe the consequences of switching to IS on profits already made: the sources consulted differ on this point and the subject should be discussed with your advisor.

Corporate tax rates and dividends

According to service-public.gouv.fr (information verified on 17/02/2026), the company is taxed at the standard rate of 25% on profits earned in France during its fiscal year. A rate of 15% applies to the portion of profits up to €42,500, subject to two conditions: a turnover of €10,000,000 or less and fully paid-up share capital held at least 75% by individuals.

When a French SCI (Société Civile Immobilière) distributes dividends to an individual shareholder, the flat-rate tax (PFU) is 31.4%, comprising 12.8% income tax and 18.6% social security contributions. The shareholder can opt for the progressive tax scale, with a 40% allowance. The information sheet does not specify the year this rate applies; this should be verified for the year of distribution. Details can be found on our page about dividends and the flat-rate tax.

Capital gains and depreciation subject to corporate income tax

Two rules of the BOFiP concern the property itself.

• Capital gain on disposal. Capital gains and losses on the disposal of fixed assets are included in taxable income under the standard rules and at the standard rate (BOI-IS-BASE-20). The long-term capital gains regime is excluded, except for certain exceptions, including equity securities.
• Depreciation. Only the cost price of the building itself, excluding the cost of the land, is eligible for depreciation (BOI-BIC-AMT-10-20, § 10, effective since August 5, 2026). Land is not depreciable (§ 230). If the cost price is not itemized, only the portion corresponding to the building is eligible.

Amortization rates and periods are not discussed here.

SCI and 10 %: numerical example (fictitious profile)

Situation. Three fictitious real estate companies, X, Y and Z, owned by two individual partners with equal shares. The amounts are hypothetical.

Issue. To know which side of the 10 % threshold each SCI is on, then calculate the IS and the PFU for SCI Z.

Strategy. Test each SCI without choosing between the two formulas: since the only income of each SCI is rent excluding VAT, the turnover excluding VAT and the total revenue excluding VAT are equal, and the result is identical under both formulas. The test covers a single year, without the four-year average from paragraph 330 of the BOFiP (French Official Tax Bulletin). For SCI Z, assume a profit of €15,000 before corporate income tax, fully distributed, with the conditions for the 15% flat tax rate met, and a flat tax rate of 31.4% assumed to be applicable to the year of distribution.

Result.

For SCI Z, with €15,000 of profit before corporate income tax: the corporate income tax at 15% is €2,250. The gross dividend is €12,750 (€6,375 per partner). The flat tax at 31.4% represents €4,003.50, resulting in a net amount of €8,746.50 for the partners. The total tax (corporate income tax and flat tax) is €6,253.50, or 41.69% of the profit. If the conditions of the rate of 15 % were not met and the rate of 25 % was applied to all the profit, the IS would be €3,750, the PFU €3,532.50 and the total levy €7,282.50, or 48.55 %.

These profiles are fictitious. They illustrate the calculation of the threshold and taxation; they do not compare income tax and corporate tax and do not predict your situation.

Real estate investment companies (SCI) and furnished rentals: what changes depending on your situation

• The threshold base. Turnover excluding tax or total revenue excluding tax: the official formulations differ, as indicated above, and the basis should be verified with the administration.
• The proportion of furnished rentals. It determines which side of the 10 % threshold the SCI is located on.
• The number and status of the partners. Individual partners fall under the conditions of the 15 % rate and the PFU; other partners are subject to other rules.
• Choosing IS by option. It requires notification within the specified timeframe and a period during which revocation is possible.
• The tax residence of the partners. A non-resident partner is taxed according to specific rules, detailed on our page dedicated to this case.
• The property and its price. The portion of the construction cost, excluding the land, determines what can be depreciated.

The rule depends on your situation. No results are guaranteed.