Press Release: Taxation: Commission refers France to the Court of Justice over discriminatory property tax rules

The European Commission has decided to refer France to the EU's Court of Justice for discriminatory tax rules on new residential property. The French rules allow investments in new residential property in France to benefit from accelerated depreciation, but do not allow the same for similar investments abroad.

The French tax provisions allow accelerated depreciation to be applied to new residential property in France which is intended for letting for a minimum of 9 years. This results in favourable tax treatment for these investments. By contrast, a French taxpayer who invests in residential property to let in another EU Member State cannot benefit from accelerated depreciation, and hence cannot enjoy these tax benefits. In practice this means that taxpayers investing the same amount in immovable goods abroad would face a higher tax liability.

The Commission considers such provisions to be incompatible with the free movement of capital, a fundamental principle of the EU's Single Market.

ESO: Background information: Memo: May infringements package: main decisions http://www.europeansources.info/record/memo-may-infringements-package-main-decisions/

European Commission: Rapid: Press Release/11/160: Taxation: Commission requests France to amend discriminatory tax rules for investments in residential property to let http://europa.eu/rapid/press-release_IP-11-160_en.htm?locale=en

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