Accounting Obligations for an SCI Under the Income Tax System (IR) in France

The ideal solution for managing a property with multiple owners, the creation of a Société Civile Immobilière (SCI) is gaining popularity in France. However, before taking the plunge, many questions may arise, particularly regarding the accounting obligations of an SCI subject to Income Tax (IR) or Corporate Tax (IS), depending on the chosen tax regime.

 

At this point, what do regulatory provisions stipulate concerning the accounting of an SCI? What are the benefits of using accounting software? Are there specific rules to follow regarding the commercial accounting of the structure in different scenarios? These questions deserve clarification in this article.

Obligation comptable de la SCI à l’IR

Legislative Regulations on the Accounting Obligations of an SCI

Before delving into the legislative regulations concerning the accounting obligations of an SCI, it’s essential to recall the main characteristics of a Société Civile Immobilière. Generally, it is automatically subject to Income Tax (IR). Consequently, the profits derived from rents and real estate activities are taxed on the shareholders’ personal income tax returns within the structure. The tax distribution is based on the percentage of shares each individual holds in the received rental income, a concept known as transparent taxation.

 

Being subject to a transparent tax regime, the SCI is not required to maintain accounting records similar to commercial companies. Therefore, it is not obligated to produce a balance sheet, income statement, or fiscal appendices.

 

However, an SCI under IR must keep an up-to-date cash accounting document, recording its overall receipts and expenditures. Additionally, the civil society taxed under IR is required to declare its results through a manager at the end of the social or real estate activity. Each associate must also report the income derived from the SCI’s activities in their personal income tax return.

 

In an SCI under IR, the real estate accounting responsibility primarily lies with the manager, who can be an individual or a legal entity. The manager’s role includes reporting on the property management and providing at least an annual report to assess the effectiveness of the management methods.

When Is an SCI under IR Required to Maintain Accounting Records?

Although an SCI under IR is not initially required to maintain accounting records for its property management, this obligation becomes necessary in the following cases:

 

  • A voluntary inclusion of the accounting obligation in the company’s statutes
  • Engaging in commercial activities, such as construction and sale SCIs or investment SCIs
  • The SCI is subject to VAT
  • Annual turnover exceeding €3,100,000
  • Annual balance sheet total exceeding €1,550,000
  • A workforce of employees or shareholders exceeding 50
  • One or more associates subject to the Industrial and Commercial Profits (BIC) regime

What Are the Benefits of Accounting Obligations for an SCI under IR?

Une SCI peut de son plein gré engager un comptable ou se servir d’un logiciel de comptabilité pour rendre des comptes sur sa gestion locative. Par ailleurs, l’obligation comptable présente de nombreux avantages considérables, notamment : 

  • La justification de l’existence et la transparence des comptes de la société civile
  • Des comptes opposables au fisc
  • Un suivi minutieux de la gestion immobilière pour instaurer un climat de confiance au sein des associés et actionnaires. 

Une Société Civile Immobilière peut choisir un régime d’imposition à l’IS ou Impôt sur les Sociétés. Dans ce cas, la comptabilité immobilière est une obligation encadrée par la loi sur les fiscalités.

Point sur l’obligation comptable d’une SCI à l’IS

A company-type SCI subject to corporate tax (IS) is fully responsible for the taxation of profits earned from property management. The law requires the entity to maintain proper accounting records to clearly present the financial results and overall cash flow. The manager is therefore obligated to:

 

  • Maintain various journals for each transaction: purchases, sales, bank transfers, etc.
  • Keep a general ledger of debit and credit operations.
  • Record all accounting entries instantly and chronologically.
  • Prepare an inventory book.
  • Produce a summary of invoices and expenses (paid, unpaid, or in process) at the end of the annual fiscal year.

How to Properly Manage Real Estate Accounting in an SCI Under IR?

To ensure effective accounting management for an SCI subject to income tax (IR), it is recommended to use specialized accounting software. There are now numerous free online tools designed specifically for SCIs.

 

Alternatively, you can hire the expertise of an accountant or, even better, a certified public accountant, although this is not mandatory. Their expertise in taxation and real estate will be fully at your service.

 

Conseil Qlower

Qlower also assists SCIs with day-to-day management, accounting, and taxation!

 

Feel free to consult our specialists—they will help guide your decisions and recommend the right contacts!

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