From the toolbox to the tax trap: understanding the new face of Article 244 bis A in 2026

The year 2026 marks a major turning point for international investors holding real estate in France through corporate structures, particularly Real Estate Predominant Companies (SPI). The rulings issued by the Administrative Court of Appeal of Paris on February 19, 2026 confirmed a profound overhaul of the fiscal balances between France, Belgium, and Luxembourg.

What once relied on fine legal engineering – a true toolbox for optimizing the holding of real estate assets – has now become a system with tight and constraining taxation.

This article offers a clear and structured reading of these developments, in light of the works published as early as 2020 by the International Heritage Review, where Nicolas Billotte, lawyer and member of the editorial board, had already anticipated possible drifts in issue number 4 of this review.

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A disrupted fiscal context: the end of the mirage of movable qualification

For years, uncertainty loomed over the qualification of shares in French SCIs held by non-residents, particularly Belgian investors: were they "movable" assets (thus taxable in the state of residence) or "immovable" assets (taxable in France)?

Until 2020, certain decisions, such as that of the Montreuil Administrative Court, suggested a possible survival of the movable qualification, offering an interesting optimization space.

The CAA of Paris put an end to this without ambiguity: under the principle of Lex Rei Sitae (the law of the place where the property is located), shares of French SPIs are now classified as immovables under French domestic law.

Result: France is entitled to tax the capital gains on these transfers, even if the shareholder resides outside the territory.

This logic applies even to sophisticated dismemberment schemes (usufruct/naked ownership). It is no longer the legal form that prevails, but the economic reality of the underlying real estate. An approach that enshrines the triumph of substance over form.

Concrete consequence: investors can no longer rely on old tax treaties to escape French capital gains tax. Treaties no longer neutralize the requalification carried out by the General Tax Code.

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Another major development: the quasi-systematic subjection to social contributions (CSG/CRDS) for non-residents, even if they are affiliated with a foreign social security system.

Until then, many taxpayers based their defense on European Regulation No. 883/2004, which prohibits double social contributions. However, the decisions of 2026 validate a new French legislative strategy: these contributions are now attached to the state budget, rather than to that of social security.

This budgetary shift excludes the application of European law, thus closing the door to any request for automatic exemption.

For Belgian or Luxembourg investors, the message is clear: the overall tax cost of a French real estate capital gain must now include these contributions. This clarification creates a more readable environment, but significantly less favorable to cross-border wealth planning.

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The war of evidence: a strengthening of tax control procedures

French jurisdictions have also clarified the investigation means of the tax administration regarding transnational arrangements.

The Utility Corporate Services ruling of February 2026 is a striking illustration: it confirms the legitimacy of controls based on the “economic substance” of foreign structures.

The administration favors a dual approach:

Administrative procedural front, via adjustments related to Article 244 bis A of the CGI.

Judicial front, concerning the regularity of tax searches provided for in Article L.16 B of the Tax Procedure Book.

The administrative judge declared himself incompetent to rule on the regularity of these searches.

Taxpayers are therefore forced to conduct two parallel procedures: one before the judicial judge to contest the seizure (often for violation of professional secrecy), the other before the administrative judge to debate the tax substance.

The only notable advancement for the defense lies in an increased requirement for transparency: the administration must now communicate all orders and inventories of seizure to ensure a fair trial.

This tightening reveals a fundamental trend: the primacy of economic evidence over the legal form of the arrangement. A challenge for foreign holdings whose real “substance” is limited.

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What decision-making criteria for 2026?

In light of these decisions, the analysis criteria established in 2020 must be profoundly revised. Old strategies based on the nature of the structure or the location of the holding are no longer sufficient.

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These developments confirm a new reality: tax security now relies on documentary transparency and the economic robustness of structures.

Arrangements lacking genuine operational activity are particularly exposed to requalification.

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Key takeaways for leaders and investors

Companies, investment funds, and high-net-worth individuals often hold French real estate assets through subsidiaries or intermediate companies located in Luxembourg or Belgium.

The changes made in 2026 make it essential to conduct a comprehensive review of these arrangements from three angles:

1. Capital gains taxation: anticipate taxation in France, even for an interposed foreign structure.

2. Social contributions: integrate their cost into exit scenarios.

3. Substance documentation: strengthen proof of the economic reality of the structure (effective headquarters, locally made decisions, human resources).

Entrepreneurs and leaders must now view indirect real estate holding not as an optimization tool, but as a wealth device requiring enhanced legal oversight.

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Conclusion: the end of illusions, the beginning of vigilance

The rulings of 2026 confirm that the French administration is able to impose its internal definition of real estate assets against international treaties.

The prophetic analyses published as early as 2020 in the International Heritage Review (n°4) by Nicolas Billotte find their full illustration here: the tax lawyer's “toolbox” has transformed into a carefully closed tax trap.

For foreign investors as well as for start-ups or wealth holdings, the key now lies in documentary preparation, substantiation of structures, and anticipation of potential litigation.

In this new landscape, security no longer rests on the text, but on evidence.

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