Fiscally attractive REITS that invest in Germany ?

Your advisor encourages you to buy units of a REIT which invests mainly in Germany for the benefit of a higher return and tax advantages. What does he think ?

real estate in Germany, especially in large cities like Berlin, Frankfurt or Hamburg, is significantly less expensive than in France. Even if rents are more moderate than in france, the profitability is, therefore, more interesting.

The moderation of the tax system is also an asset. Your property income, in application of the bilateral tax treaty, are taxable at a rate of 15,825 %, often lower than what you would suffer in France with the progressive scale.

tax Exemption and not social contribution

as a resident for tax purposes in France, you must declare your income from German sources. But you are entitled to a tax credit chargeable to income tax in France. This credit is independent of the amount of tax paid in Germany and is calculated by the inland revenue as if you had declared income of REITS in france. Without detailing this calculation is fairly complex, this system of allocation has the purpose to maintain a degree of progressiveness of the tax for the other incomes of the household, but results in an exemption from rent German of French tax. In addition, they will be exempt of social contributions in France.

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A REIT with buildings in Germany is therefore an interesting solution financially and fiscally. But it has a drawback : reporting requirements burdensome as it will have to fill out a form n ° 2047 and see the result on the n° 2042.