Realty Finance Leased

The new tax rules contained in the local-development act and applicable from January 1, 1996 for realty leases are consistent with the decision made in December 1990 to gradually eliminate the special tax treatment of SICOMI's. All contracts made by a SICOMI after January 1, 1996 shall be subject to the new standard rules of taxation. The SICOMI treatment will accordingly be applicable only to contracts made before that date.

The new standard tax treatment is identical in general with the former tax treatment of leases granted by SICOMI's. The novelty is not so much the tax treatment it provides for, as the extension of a treatment applicable regardless of the lessor's tax status, regardless of the building's use, regardless of the lessee's activity in the building and regardless of the contract's term.