QPC On The French REIT-Like Regime

On the conformity to the French Constitution of the provisions of the French tax code relating to the specific REIT-like tax regime (Société d'Investissements Immobiliers Cotée, SIIC) set forth under Articles 208 C et seq of the French tax code (FTC), the Conseil Constitutionnel ruled that these provisions, which lead to a differentiated tax treatment of unrealized capital gains, did not create a breach of equality between taxpayers.

In the case at hand, the taxpayer was challenging the constitutionality of Article 208 C ter of the FTC, which provides that a tax on unrealized capital gains is due, when certain non-eligible assets of a company who has already elected for the SIIC tax regime become eligible to this regime. Unlike the tax on unrealized capital gains which applies upon the election of a company for the SIIC tax regime and which is also paid in four installments over four years, the applicable tax rate of such so-called exit tax is the rate applicable on