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Company subject to corporation tax
Investing through a company subject to corporate income tax: less tax during, more upon exit.
A French real estate investment company (SCI) or a company subject to corporate income tax pays little tax as long as the rental income remains within the company, thanks to the building's depreciation. The cost is paid later: through dividend distribution and resale. The best choice depends on how you intend to use the rental income.
IR or IS
Two regimes, two logics.
| Direct or SCI taxed under the IR scheme | Company subject to corporation tax | |
|---|---|---|
| Rents | Taxed annually at your home, at the rate plus 17.2 % | Imposed in the company, at 15 % then 25 % |
| Building depreciation | No | Yes, off-field: it reduces taxable profit |
| Deficit | Deductible from your other income up to €10,700 per year (Article 156 of the French General Tax Code) | Deferred to the company's future profits, without time limit |
| Money available for you | Immediately | After dividend, taxed at 31.4 % in 2026 |
| Capital gain upon resale | Tax-exempt after 22 years and social security contributions-exempt after 30 years | Calculated on the amortized value, without any reduction for duration |
Worked example
€20,000 in rent: €500 in tax instead of €8,148.
An executive in the 41 % salary bracket buys a building of €400,000, including €320,000 for the building, financed by credit. Net rents after charges: €20,000 per year, interest: €6,000.
€14,000 of rental income after interest, taxed at 41 % plus 17.2 %: €8,148 of tax each year, paid with the money that was meant to repay the bank.
The building is depreciated over 30 years: €10,667 per year. Profit: €20,000 − €10,667 − €6,000 = €3,333, taxed at 15%. €500.
The rents remain within the company: if they are paid to you, 31.4 % is added. Upon resale, the capital gain is calculated on the depreciated value. The IS is used to capitalize, not to live off rent.
Points to know
Before creating the company.
A French real estate investment company (SCI) is subject to personal income tax (IR) by default. The option for corporate income tax (IS) can be revoked until [date]. fifth exercise ; beyond that point, it is final (article 239 of the CGI).
Holding real estate through a company subject to corporate income tax does not exempt it from the French wealth tax (IFI): the value of the shares representing the real estate remains taxable beyond a certain threshold. €1.3 million (articles 964 and 965 of the CGI).
Property occupied by a partner has no place in a company subject to corporate income tax. Since 2026, in a company with at least €5 million in revenue and primarily passive income, it is taxed at 20% a year (Article 235 ter C of the CGI).
Simulators
Run the numbers with your own figures.
Frequently asked questions
What clients ask us.
Can an existing SCI (real estate investment company) be switched from IR (personal income tax) to IS (corporate income tax)?
Yes, but switching to corporate income tax is treated as a cessation of business activity: unrealized capital gains become taxable (Article 202 ter of the French General Tax Code). The calculation is done before opting in, on an asset-by-asset basis.
How to withdraw money from a company subject to corporate income tax?
Through repayment of your shareholder current account, tax-free; through a dividend, taxed at 31.4% in 2026; or through management fees, subject to social security contributions. The shareholder current account is repaid first.
Does the company's deficit reduce my income tax?
No. A company's deficit subject to corporate income tax remains within the company and can be offset against future profits, without any time limit. This is the opposite of a real estate investment company (SCI) subject to personal income tax, where a property deficit can be offset against your other income up to €10,700 per year (Article 156 of the French General Tax Code).
Corporate tax or furnished rental under the LMNP scheme?
Both options allow you to depreciate the property. The LMNP (furnished rental property) status keeps the income with you, according to the tax brackets, and since February 15, 2025, the deducted depreciation is added back to the capital gain upon resale (Article 150 VB of the French General Tax Code). The corporate tax (IS) structure is better suited to those who reinvest the rental income.
