French government introduces new tax credit for landlords to forgo rent payments


France: French government introduces new tax credit for landlords to forgo rent payments

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The French government has implemented a new support measure for businesses in difficulty due to the COVID-19 pandemic. A new tax credit will encourage homeowners to waive all or part of rent payments due during the second foreclosure period.

The new measure is aimed at all types of landlords – individuals and businesses, taxed or exempt – on condition that they waive all or part of the rent owed by a business that:

  • Is administratively closed or belongs to the hospitality, culture or events sector;
  • Employs less than 5,000 employees; and
  • Was not in compulsory liquidation on March 1, 2020 or in difficulty (under Commission Regulation (EU) No 651/2014 of June 17, 2014) on December 31, 2019.

The tax credit is equal to 50% of the amount of the canceled rent. It is specified that, for business owners with more than 250 employees, the tax credit base would be capped at two-thirds of the rent provided for the lease.

The total amount of rent waivers giving rise to a tax credit for the landlord may not exceed € 800,000 per tenant.

The tax credit will be charged against personal or corporate income tax for 2021. Any deductible will be refundable.

This support measure will be cumulative with that paid by the solidarity fund, allowing the most affected companies to benefit from compensation of up to € 10,000. It is introduced as a complement to another incentive measure for landlords that was introduced during the first foreclosure period, which until December 31 means that abandoned rents are not taken into account in taxable income. of the owner.

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