Lawyer Monthly - February 2023

the SPPICAV often appears as a more convenient structure. Even if the SPPICAV is subject to CIT, it may be more convenient when compared to the SIIC, notably for the following reasons: - the SPPICAV is not a listed entity, which is therefore not subject to stronger regulations; - there is no minimum share capital; - there is no restriction on the capital repartition. However, the assets repartition of the SPPICAV is limited to the obligation of holding at least 51% in real estate. Similarly to the SIIC, the SPPICAV is subject to distribution obligations every year: - 85% of the rental income - 50% of other income Have there been any legislative changes during 2022 when it comes to tax and property in France? Pursuant to article 279-0 bis of the FTC in application of the Finance Bill for 2023, VAT is levied at the reduced rate of 10% on improvement, transformation, development and maintenance work relating to residential premises completed over two years ago. Similarly, pursuant to the provisions of Article 278-0 bis A of the FTC, VAT is collected at the rate of 5.5% on energy quality improvement works in the same dwellings. At the same time, when the work is carried out by a professional lessor, article 257, II-1-2° of the FTC provides that if this work contributes to the enhancement or extension of the life of the building, it must give rise to the taxation of self-delivery when the building subject to the work is assigned to operations not subject to VAT – which is the case when the building is assigned to a rental activity for residential use (this type of rental being exempt from VAT). As for the rate applicable to this selfdelivery, it is in principle 20% except for works relating to social housing. What tax developments should French corporates watch out for in the year to come? The tax developments are mainly issued by the OECD rules with a specific practice and by case law (although France is supposed to be a civil law country). A substantial change concerns VAT with the electronic filing. The system adopted by article 26 of the Amended Finance Bill for 2022 and the Finance Bill for 2023 is based on two objectives relating to the generalisation of electronic invoicing in transactions between persons subject to VAT and the transmission of transaction data: - widespread use of electronic invoicing; - the obligation to transmit to the administration and in a dematerialised manner the information relating to the operations carried out by persons subject to VAT which are not taken from electronic invoices. In practice, the implementation of electronic invoicing will be done according to a gradual schedule, which will limit the effects of this transition on companies and gradually include them according to their size. The dates will be 1 Janary 2024 for large companies, 1 January 2025 for midsized companies (ETI) and 1 January 2026 for SMEs and VSEs. Article 62 of the Finance Bill for 2023 completes this reform by making two changes. The first complements article 289-VII of the CGI, relating to the terms under which taxable persons can issue or receive invoices. They will now be able to use the qualified electronic seal procedure within the meaning of the European regulation known as the ‘eIDAS regulation’. This procedure is in addition to those already provided for, namely the electronic signature, the reliable audit trail and the structured message. The second modifies article L. 102 B of the Tax Proceedings Code in order to provide that the books, registers and documents drawn up or received on a computer medium must be kept in this form for a period of six years from the date of the last transaction mentioned in the books or registers or the date on which the documents or records were drawn up. There would therefore no longer be the possibility of keeping them for three years on a computer medium, then of switching to another medium for the last three years. 22 LAWYERMONTHLY FEBRUARY 2023 I believe I took the journey of international tax law in because I am driven by solving the most complex and challenging legal issues as efficiently as possible.

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