Corporate Tax SCI: Advantages, Tax Pitfalls, and Rental Income Contribution (CRL)

The Context: between Tax Instability and the Search for Solutions

Given the tightening of furnished rental taxation and the gradual phasing out of certain advantageous schemes, many owners are turning to a Civil Real Estate Company subject to corporate income tax (IS).

This ownership structure, often presented as a secure alternative, offers several advantages: tax stability, management flexibility, and real estate yield optimization.

However, behind its apparent strengths, the Corporate Tax SCI hides tax pitfalls that are sometimes overlooked, notably the rental income contribution (CRL).

Tax Advantages of the Corporate Tax SCI

Creating a Corporate Tax SCI allows for a more predictable tax regime than that of the furnished rental regime (LMNP or LMP).

The main advantages are:

• ✅ Greater tax stability: the corporate tax regime changes little, unlike that of property income or furnished rentals.
• ✅ Neutralization of personal taxation: individual partners are not directly taxed on rental income, as long as they do not receive dividends.
• ✅ Ability to capitalize: profits can be retained within the company to finance future investments or strengthen cash flow.
• ✅ Depreciation of real estate assets: properties recorded as assets of the SCI can be depreciated, thereby reducing taxable profit.

Thus, the Corporate Tax SCI may seem more profitable in the short and medium term, especially for investors who wish to reinvest their rental income in new projects.

Often Overlooked Disadvantages

However, this tax regime has several perverse long-term effects.

In case of resale of the property, the real estate capital gain is calculated according to rules specific to corporate tax:

• it includes the depreciation applied over time,
• and no allowance for length of ownership applies (unlike an Income Tax SCI).

Result: the taxation upon sale is often significantly heavier than anticipated.

However, the most overlooked risk remains the CRL (rental income contribution), an additional tax that many taxpayers discover too late.

The CRL: a Discreet but Costly Tax

When Does the CRL Apply?

The rental income contribution (CRL) is due by:

• legal entities subject to corporate tax,
• partnerships of which at least one partner is subject to corporate tax (Article 234 nonies of the French Tax Code).

In other words, it is sufficient for a single partner of an SCI to be subject to corporate tax for all rental income received to become subject to the CRL.

This condition is assessed at the close of the financial year.

Possible Exemptions

Certain SCIs are exempt from this contribution:

• those subject to VAT on their rents;
• those whose annual rent per premises does not exceed €1,830;
• holiday villages and approved family homes;
• new or recent buildings, completed less than 15 years ago as of January 1st of the tax year.

Thus, for 2025, the CRL only applies to buildings completed before January 1, 2010.

CRL Amount

The CRL rate is set at 2.5% of gross rents collected.

This percentage, although seemingly modest, directly impacts the profitability of the scheme, especially when rents are high.

Concrete Example

Let’s consider the case of a Corporate Tax SCI receiving €60,000 in annual rent for an old building.

The CRL amounts to €1,500 per year, or €7,500 over 5 years, with no possibility of deduction.

This additional charge is added to corporate income tax (IS) and dividend taxation in case of distribution.

A Strategy to be Evaluated Case by Case

The choice to subject an SCI to corporate tax must be carefully considered.

It may be relevant for:

• long-term wealth management projects,
• or highly profitable investments with regular reinvestment.

Conversely, for owners wishing to resell in the medium term, the Income Tax SCI often remains more advantageous.

A personalized comparative study is therefore essential to assess:

• the effective tax rate,
• exit taxation,
• and the cumulative effects of depreciation on capital gains.