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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.

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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

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