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Inovalis Real Estate Investment Trust has provided an update on a withholding tax dispute involving its Arcueil property for the 2017-2019 period, where it held a 25 % stake through a joint venture. The Paris Administrative Court confirmed a liability of around EUR 5.888 million (USD 9.294 million), including taxes, penalties, and interest. The French tax authority issued a formal payment notice, and the REIT secured a 12 month instalment plan, though late payment interest will continue to accrue. In parallel, the trust has filed an appeal seeking to recover EUR 4.116 million (USD 6.635 million) by providing additional documentation on tax residency and partner status. The final outcome of the appeal remains uncertain.
Inovalis Real Estate Investment Trust has updated its stakeholders regarding the withholding tax issue related to its Arcueil property interests for the 2017-2019 tax years. The Paris Administrative Court has upheld a tax liability of approximately EUR 5.888 million, which includes the principal, penalties, and interest. The French tax authorities have issued a payment notice, and late payment interest will continue until the liability is fully settled. Advertisement
The REIT has obtained approval from the French tax authority for a 12 month instalment plan and intends to fund its subsidiary accordingly. Meeting this obligation may require using proceeds from planned asset sales or other financing measures.
Alongside this, Inovalis REIT has filed an appeal to recover about EUR 4.116 million in withholding taxes. The appeal includes documentation to support the tax residency status of its Luxembourg based subsidiary, CanCorpEurope, and the regulated entity status of its Korean joint venture partner, which may influence tax treatment. However, filing the appeal does not suspend the existing payment requirement, and the final result remains uncertain.
Inovalis REIT, listed on the Toronto Stock Exchange, focuses on office properties in France, Germany, and Spain. The Arcueil property has previously been part of planned asset sales, including a conditional sale of a majority stake agreed in late 2024, subject to permits and approvals, with potential closing in the second half of 2026.
Source Reuters
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