4: Determining taxable income

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2829303131 bis31-0 bis32

Article 31 bis

French General Tax CodeIn force
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Updated 8 Nov 2023

The member of a société civile de placement immobilier, governed by articles L. 214-114 et seq. of the French Monetary and Financial Code, whose share of income is, pursuant to Article 8, subject in its own name to income tax in the property income category, may, by irrevocable option exercised when filing the income tax return for the year of subscription, make a deduction for depreciation. This deduction is equal to 6% for the first seven years and 4% for the following two years of 95% of the amount of the cash subscription to the initial capital or capital increases of this company made between 3 April 2003 and 31 December 2009. The amortisation period starts on the first day of the month following that of the subscription.

This deduction, which does not apply to income from securities whose ownership is split, is subject to the condition that 95% of the subscription is used exclusively to finance an investment for which the conditions for application of the deduction provided for in h or l of 1° of I of Article 31 are met. In addition, the company must undertake to let the property in accordance with the conditions and limits set out in h or l of 1° of I of the aforementioned article. The shareholder must undertake to retain all of his shares until the expiry of the commitment made by the company. All proceeds from the annual subscription must be invested within eighteen months of the end of the subscription period. The company may not benefit from the deduction provided for in j of 1° of the I of Article 31 during the period covered by the rental commitment.

As long as the conditions regarding the tenant's rent and resources set out in the second paragraph of l of 1° of I of Article 31 remain met, the shareholder may, for periods of three years and for a maximum of six years, benefit from a depreciation deduction equal to 2.5% of 95% of the amount of the subscription. In the event of non-compliance with the rental conditions or the sale of the property or units, the deductions applied during the entire three-year period are called into question under the conditions of ordinary law.

A decree sets out the obligations incumbent on the members and companies mentioned in this article.

Mariela Petrova

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Common Questions

Working with a corporate lawyer in France — Q&A

Any time a strategic decision changes how the company is owned, governed or contractually bound — incorporation, fundraising, M&A, restructuring, shareholder agreements, or major commercial contracts. Earlier engagement always costs less than later remediation.

A notary (notaire) is a public officer who authenticates specific deeds (mainly real-estate transfers and certain family-law acts). A corporate lawyer (avocat) advises on strategy, negotiates and drafts company documents, and represents you in disputes. The two roles complement rather than overlap.

Yes — most of our clients are foreign suppliers, investors or holding entities. We bridge the gap between French law and your home jurisdiction's expectations and deliver everything bilingually.

The SAS (Société par Actions Simplifiée) is the default choice for most international structures: flexible governance, single shareholder allowed, no minimum capital, and works cleanly with foreign holding entities. We assess SARL, SA, SCI on the merits when the situation calls for it.

Yes — communications with a French avocat are protected by the secret professionnel (Article 66-5 of the Law of 31 December 1971). This protection is broader than the common-law attorney-client privilege and applies to written and oral exchanges.

We work on fixed fees for clearly scoped engagements (incorporation, contract drafting, audits) and on monthly retainers for ongoing advisory. Hourly billing is the exception, not the default. You always know the cost before work starts.

Typical timeline is 2–3 weeks from KYC kick-off to RCS registration, assuming standard documentation. Holding-company structures, foreign-shareholder identification or in-kind contributions can extend this — we flag the gating items at the first meeting.

Absolutely. We routinely coordinate with your in-house counsel, expert-comptable or notaire — pragmatic collaboration is the norm, not the exception. We send them everything they need to do their part without duplicating work.

Mariela Petrova

Mariela Petrova

Avocate au Barreau de Paris

Toque #C2396

15+ Years In Corporate Practice

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Communications protected by professional secrecy — secret professionnel de l'avocat, Article 66-5 of the Law of 31 December 1971.

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