Real Estate Investment Companies (SCI) Taxed at the Individual Level and Registered Address: Be Aware of Corporate Income Tax

A real estate investment company (SCI) that believed it should be taxed under the partnership tax regime was subject to a tax audit. Following the audit,administration determined that the company was subject to corporate income tax and took the necessary steps, including issuing a tax assessment to one of the partners.

The Administrative Court of Appeals, to which the case was referred, first held that at least part of the company’s business consisted of renting furnished properties and that this aspect alone was sufficient, under the law, to conclude that the company was indeed subject to corporate income tax.

The Court will, however, proceed to examine whether the exemption provided for under administrative doctrine—according to which unincorporated partnerships deriving less than 10% of their revenue from commercial activities are not subject to corporate income tax—was applicable.

She first notes that renting out unfurnished apartments did not constitute a commercial activity, even if certain services were provided in addition to the rent.

She notes, however, that the company had also authorized, for a fee, the use of registered addresses for companies within the buildings owned by the SCI. She points out that it had not been demonstrated that the registered address services did not include the use of the apartment during periods when it was vacant, particularly for holding meetings.

The Court therefore held that the domiciliation service constituted the rental of furnished residential premises and was thus of a commercial nature.

The Court thus finds that the amount of revenue from commercial activities does not exceed 10% for a given year and therefore exempts the taxpayer solely with respect to such revenue.

CAA Lyon, Feb. 19, 2026, No. 24LY02361

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