As a matter of principle, rent waivers granted by a lessor to its lessee are not deductible from the lessor’s taxable income, unless the waiver qualifies as assistance of a commercial nature granted as part of normal management (art. 39,13 of the French General Tax Code (“CGI”)).
Therefore, in the absence of justification, the accounting expense corresponding to the rent waived is not deductible and must be added back to determine the lessor’s taxable income. This reintegration must be carried out even though the rents would not have been received as a result of the abandonment.
However, as an exception to the above principle of non-deductibility, aid granted, in particular in the form of rent waivers, to a company in receivership, reorganisation or compulsory liquidation, is deductible from the lessor’s taxable income without justification (CGI, art. 39,1-8)
However, exceptional measures relating to the COVID-19 crisis have modified these principles.
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