Switzerland – Geneva Revises Wealth-Tax Treatment of French SCIs Held by Geneva-Resident Individuals

Key Highlights of the Federal Supreme Court Decision

• An SCI is recognized as a legal entity under French civil law but may be taxed in France either at the individual level or at the corporate level, depending on its tax status.
  
  
• For Swiss tax purposes, participations in an SCI are treated as participations in a legal entity (securities) rather than as direct ownership of real estate.
  
  
• If French IFI (Impôt sur la Fortune Immobilière) is not effectively levied and the relevant net taxable real estate value does not exceed the EUR 1.3 million threshold, then the “effective taxation” requirement under the France-Switzerland tax treaty will not be met. Switzerland will therefore fully tax the SCI participations for wealth-tax purposes.
  
  
• If IFI is effectively levied on the underlying real estate, Switzerland may apply exemption with progression to the corresponding portion, subject to cantonal implementation, to address potential double taxation.

Geneva practice before and after the change

Following the Federal Supreme Court decision, the existing practice in the canton of Vaud was confirmed. In the canton of Geneva, however, the decision resulted in a change in practice that was clarified in 2026.

Note: The Geneva tax authorities previously treated participations in French SCI as foreign properties if the underlying income and assets were reported in France at the individual level.

Under the revised Geneva practice, the following tax treatment and reporting requirements apply to French SCI interests held by Geneva tax residents:

• Participations in French SCIs are treated as movable assets, specifically securities, for Geneva cantonal and communal wealth-tax purposes.
  
  
• If the “effective taxation” condition is not met because no IFI is due in France, the full value of the SCI is taxable in Geneva as wealth.
  
  
• If IFI is effectively levied in France on the SCI held real estate, Geneva would apply treaty exemption with progression for the corresponding portion.
  
  
• Rental income derived from an SCI treated as transparent for French tax purposes may generally be reported in Geneva for tax-rate determination purposes only.
  
  
• Distributions derived from a French SCI may be treated as taxable dividend income, with the possibility of applying a tax credit, provided that there is proof of taxation in France.
  
  
• Individuals who are tax residents in Geneva and hold interests in French SCIs are required to complete a dedicated SCI annex, which should be attached to their annual Geneva tax return.

The SCI annex published in 2026 is intended to:

• identify all SCIs, including their names, SIREN identification numbers, addresses, and ownership percentages;
  
  
• describe the underlying assets (real estate, debts, etc.); and
  
  
• determine the taxable value for wealth and income tax purposes in Geneva and any portion that may qualify for treaty exemption.

The form and instructions, which are available in French only, can be accessed on the Geneva tax authorities’ website. The revised reporting requirements may apply retroactively to tax years for which assessments remain open. Currently, this annex is available only for the 2024 and 2025 tax years.

Contacts