The French Law on Combating Social Security and Tax Fraud introduces significant changes to the French 3% annual tax regime applicable to entities holding, directly or indirectly, French real estate.
The main change is the abolition of the disclosure commitment mechanism. Entities that previously relied on a simple undertaking to provide ownership information upon request will now be required to file an annual 3% tax return in order to maintain their exemption, with the first filing due by 15 May 2027.
In addition, foreign entities without a permanent establishment in France that are subject to the reporting obligations must now appoint a French tax representative in their annual 3% tax returns. This representative will be authorised to receive communications from the French tax authorities regarding the monitoring and enforcement of the 3% tax.
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