France: Tax treatment of rental debt waivers granted by lessors (COVID-19)

France: Tax treatment of rental debt waivers

A mechanism to encourage lessors to waive rental debts to be paid by their lessees introduces a provision to allow lessors to temporarily automatically deduct from tax such rental debt waivers. This temporary mechanism comes in addition to the standard mechanism of deductibility of debt waivers (e.g., enterprises subject to insolvency proceedings) as tax relief offered in response to the coronavirus (COVID-19) pandemic.

1000

Related content

For the lessor

Rental debt waivers related to real estate properties lease agreements as granted to “professional lessees” only (and not to individuals) and made between 15 April and 31 December 2020 are fully tax deductible for the lessors (without any additional conditions or evidence to be met).

The lessor and the lessee must not be considered to be “related parties.”

The mechanism is applicable to lessors with fiscal years closing on or after 15 April 2020.


For the lessee

For lessees subject to corporate income tax, the €1 million ceiling available to offset tax losses will be increased by the amount of the rental debt waivers granted between 15 April 2020 and 31 December 2020.


For more information, contact a tax professional with KPMG Avocats in France:

Marie-Pierre Hôo | + 33 (0) 1 55 68 49 09 | mhoo@kpmgavocats.fr

Patrick Seroin Joly | + 33 (0) 1 55 68 48 02 | pseroinjoly@kpmgavocats.fr

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal