Expats in France: Investing in Unfurnished Rental Property
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"Understanding how French rental taxation works is essential for expat investors to correctly structure their real estate investments and anticipate their tax obligations." LC Finance
This Week’s Strategic Focus A Guide for Expats Living in France: Unfurnished Rental Taxation
How the Micro-Foncier and Régime Réel tax regimes apply to expats
How to determine eligibility thresholds for non-furnished rental income
How rental income is calculated and taxed for expatriates in France
How social contributions (URSSAF) apply to "revenus fonciers" for expats
Renting a unfurnished apartment you bought in your own name
Introduction
You are an expat who has recently arrived in France, or perhaps you have been living here for a few years already. As a newly inspired expatriate ready to embrace the French lifestyle, you decide to enjoy fresh croissants and dive into real estate investment across the country taking advantage of its beautiful stone properties dating back to the Middle Ages, or opting instead for modern buildings with the latest insulation technologies if you prefer starting from scratch, with the intention of renting them out.
You are most likely making a very smart decision by investing in French real estate, allowing you to benefit now or in the future from passive income generated through property ownership.
This article will be of particular interest to you as it explores the tax framework applicable to unfurnished rentals under the “revenus fonciers” category. Indeed, the French tax authorities take a different approach to your taxation depending on whether you choose to rent your property furnished or unfurnished.
Revenus Fonciers” in France
“Revenus fonciers” refers to income derived from renting out unfurnished property held in your own name (as an individual, as opposed to through a company). If these properties are rented furnished, they fall under the BIC category (industrial and commercial profits) → LMP or LMNP status. In that case, please refer to the article on LMP here: LMP
“Revenus fonciers” also includes income derived from unfurnished rentals carried out through a company that is subject to income tax (IR), as opposed to corporate tax (IS). The company must have a civil purpose (non-commercial activity), which is typically the case for an SCI. Commercial companies such as an SARL do not qualify for “revenus fonciers” treatment, even if they are subject to income tax (IR).
For example: If you own a French SCI that has opted for income tax (IR) and acquires properties to rent them out unfurnished, then the income is indeed classified as “revenus fonciers”.
WARNING: if the company acquiring and renting out the properties unfurnished is subject to corporate tax (IS), then this article does not apply to you, as in that case the income is not considered “Revenus fonciers”.
In addition, if you rent out undeveloped property (such as land) in your own name, this is also considered “Revenus fonciers”, and this article applies to you.
Finally, if you rent out undeveloped property (land) through a company that has opted for income tax (IR), this is also considered “Revenus fonciers”, and this article applies to you. Once again, be careful: if the company acquiring and renting out the land is subject to corporate tax (IS), then the income is not classified as “Revenus fonciers”, and this article does not apply to you.
Finally, the following types of income are also classified as “Revenus fonciers”:
- Rental income received for granting advertising rights on an apartment/house that is itself rented out unfurnished and already classified under “Revenus fonciers”
- Rental income received for allowing hunting or fishing rights on undeveloped land
- Rental income received when you lease the rooftop of an apartment/house (itself rented unfurnished) to install a mobile telecommunications antenna, with rent paid by a telecom operator
Example - “Revenus Fonciers”: Mr. François Dupont and Mrs. Françoise Dupont each hold 50% of the shares in an SCI that has opted for income tax (IR) and acquires and rents out unfurnished properties. The SCI generates a taxable profit of €40,000 from renting out these unfurnished apartments. Mr. and Mrs. Dupont must each declare €20,000 of “revenus fonciers” (50/50 split) in their tax return using form no. 2072-S-SD: Form 2072-S-SD
Example – Not “Revenus Fonciers”: Mr. François Dupont and Mrs. Françoise Dupont each hold 50% of the shares in an SARL that has opted for income tax (IR) and acquires and rents out furnished properties. The SARL generates a taxable profit of €40,000 from renting out these furnished apartments. Mr. and Mrs. Dupont do not fall under the “revenus fonciers” category and therefore cannot file form 2072-S-SD.
What is the impact of being classified as “Revenus Fonciers” or not?
In France, the nature of your rental income completely changes the way it is taxed by the French tax authorities. Indeed, there are numerous calculation rules that can significantly affect the final amount of tax you will pay.
Depending on whether you are classified as “revenus fonciers” or, for example, under the LMP regime, the amount of tax due can be very different and is often difficult to anticipate in advance.
In addition, taxes are not the only difference. Social contributions will also vary considerably depending on the classification of your rental income.
This is why it can be highly beneficial to seek advice from a professional before getting started. When it comes to real estate, especially property investment, you can always begin with one structure and later change it
For example: switching from unfurnished rental to furnished rental.
However, you should be aware that in most cases, the French tax system applies significant costs when changing the rental regime or structure.This is a very important topic. Taking the time to plan before investing and thinking carefully about your objectives and the available tax strategies is well worth it. Whether you are planning short-term or long-term property investments, choosing the right structure from the beginning can lead to substantial tax savings.
There are two main tax regimes applicable to “revenus fonciers”. In order to benefit from one of these two regimes, you must first meet the conditions set out above and qualify as having “revenus fonciers” status. Please refer to section 1 → “Scope of Application of Revenus Fonciers in France”.
Regime
2.1 Conditions to benefit (Article 32 of the French General Tax Code)
If your gross annual rental income from unfurnished properties does not exceed €15,000 , you are automatically eligible for the “micro-foncier” tax regime.
This regime does not apply if you have opted, with the advice of a professional, for certain tax incentive schemes such as Périssol, De Robien, Borloo, or any other scheme named after a government minister who introduced it. Exception: the micro-foncier regime does apply to the Pinel scheme. However, this is not the focus of this section, which is intended to explain the micro-foncier regime on its own, without considering combinations with other regimes.
The micro-foncier regime consists of calculating your income tax and social contributions based on your rental income, after applying a standard deduction intended to represent the expenses incurred during the year for maintaining your rental properties.
In other words, under the micro-foncier regime, you cannot deduct your actual expenses, even if they are real and significant. Instead, the tax authorities (and URSSAF, the social security contribution agency) allow you to apply a flat 30% deduction on your total rental income before calculating income tax and social contributions.
As mentioned above, eligibility for this regime requires gross rental income below €15,000 per year. Once you exceed €15,000 in rental income, you automatically and without exception switch to the “régime foncier réel”, which will be discussed in the next section.
If you rent as an individual and earn less than €15,000 in annual rent, you automatically fall under the micro-foncier regime. If you rent unfurnished properties through an SCI subject to income tax (IR), and your share of rental income is below €15,000, you also fall under the micro-foncier regime.
Before moving on to an example, note that once the 30% deduction has been applied, you will pay income tax as well as social contributions of 17.2% on the remaining (net) rental income.
Regarding income tax, it is not possible to determine in advance whether you will pay 0%, 11%, 30%, 41%, or 45% on the net income after the 30% deduction. Indeed, since under the “revenus fonciers” regime you are renting unfurnished property either as an individual or through an income tax (IR) entity SCI (and not a corporate tax (IS) company), you are taxed according to the following progressive income tax brackets:
Table : Progressive Income Tax Rates Applicable to 2025 Income
| Income Brackets | Tax Rate |
|---|---|
| From €0 to €11,600 | 0% |
| From €11,601 to €29,579 | 11% |
| From €29,580 to €84,577 | 30% |
| From €84,578 to €181,917 | 41% |
| Above €181,917 | 45% |
This means that your rental income, after applying the 30% deduction, will fall into the tax brackets shown above and will be added to your other sources of income such as salaries, business income, or pensions.
For example: If you earn €0 from employment, salaries, or pensions,
and only receive €10,000 in gross rental income, then after applying
the 30% deduction: €10,000 - 30% x (€10,000) = €7,000.
These €7,000 will fall into the tax brackets shown in the table above.
However, since the first tax bracket up to €11,600 is taxed at 0%,
your total income of €7,000 will be taxed at 0% in this specific case,
meaning no income tax is due.
On the social contributions side, the same €7,000 will be subject to a flat rate
of 17.2% applicable to individuals under the
micro-foncier regime.
17.2% of €7,000 = €1,204.
Therefore, in this example, if you are single, living alone, and
your only income is €10,000 from unfurnished rental property (“revenus fonciers”),
and you qualify for the micro-foncier regime
(as your rental income is below €15,000), you will pay €0 in income
tax and €1,204 in social contributions.
Therefore, in this example, if you are single, living alone, and your only income is €10,000 from unfurnished rental property (“revenus fonciers”), and you qualify for the micro-foncier regime (as your rental income is below €15,000), you will pay €0 in income tax and €1,204 in social contributions.
You will notice that depending on your household situation (married, children, etc.), your total income will be combined, and once certain thresholds are reached, your net rental income after the 30% deduction may fall into a higher tax bracket.
Finally, in the worst-case scenario, your micro-foncier income could be taxed at the top marginal rate of 45%, in addition to the flat 17.2% social contributions—resulting in a total effective rate of 62.2% of your income being paid in taxes and contributions. And all of this without being able to deduct any actual expenses or renovation works carried out on your property.
Example -> Micro-Foncier (assumptions):
As your rental income is below €15,000, you automatically fall under the micro-foncier regime.
From a tax perspective, your rental income after the 30% deduction (€7,000)
will be added to your €45,000 taxable salary, and the total will be subject to
the progressive tax brackets. From a social contributions perspective, you will pay 17.2%
on the €7,000 (rental income after the 30% deduction), in accordance with the micro-foncier regime.
| Breakdown | Amount |
|---|---|
| Gross rental income | €10,000 |
| Loan repayments on the property | Not relevant - not deductible under the micro-foncier regime |
| Maintenance and repair expenses | Not relevant - not deductible under the micro-foncier regime |
| 30% micro-foncier deduction | 30% × €10,000 = €3,000 deduction |
| Taxable micro-foncier income | €10,000 – €3,000 = €7,000 |
| Social contributions (17.2%) | 17.2% × €7,000 = €1,204 |
| Total taxable income base (salary + micro-foncier combined) | €45,000 salary + €7,000 rental income = €52,000 |
| Total income tax (see note below for details *) | €8,704 |
| TOTAL TAX BURDEN | €8,704 + €1,204 = €9,908 |
* €52,000 to be allocated across the progressive income tax brackets: (€11,600 − €0) × 0% + (€29,579 − €11,601) × 11% + (€52,000 − €29,580) × 30% = €8,704
3 – The “Régime Réel Foncier”
3.1 General explanations
The “régime réel foncier” automatically applies when your annual rental income exceeds €15,000.
This regime allows you to deduct actual expenses from the rental income received, provided these expenses are accepted as deductible by the French tax authorities, in order to determine a true taxable result (income minus expenses), which will then be subject to taxation.
We will discuss in the following sections which expenses are accepted as deductible under the “revenus fonciers” framework. Remember that to determine whether you fall under the “revenus fonciers” category, you can refer back to the beginning of this article, where the definition and scope are explained. If you are not classified under “revenus fonciers”, then the rules described here do not apply to your tax and social contribution calculations. As a landlord, you may instead fall under LMP, LMNP, or even operate through a company subject to corporate tax (IS). In such cases, the rules can differ significantly.
Also note that deductible expenses are only taken into account if they have actually been paid during the relevant tax year. If you have received an invoice but have not paid it within the tax year, then even if the expense is theoretically deductible, you cannot deduct it for that year. It will only become deductible in the year it is paid.
Example: on December 29, 2025, you receive a €170 invoice for boiler maintenance for one of your unfurnished rental apartments. If you pay this invoice in January 2026, the expense will be deductible for the 2026 tax year, not 2025.
Finally, the general principle applied by the French tax authorities is that an expense is deductible if it is necessary to acquire or preserve rental income, unless it is specifically listed as non-deductible. In other words, if the expense contributes to generating or maintaining your rental income, it is generally deductible.
For example, paying for boiler maintenance is deductible because it ensures the property remains compliant and habitable for the tenant, allowing them to heat the property during winter. This helps you continue collecting rent and therefore maintain your rental income.
On the other hand, if you decide to take out three separate insurance policies to cover unpaid rent, the tax authorities may question whether this is genuinely necessary to preserve your rental income. One policy may be sufficient. In such a case, the tax authorities could consider that the additional policies were taken out solely to artificially reduce your taxable income and may therefore disallow the deduction of the excess insurance costs.
If this happens, the tax authorities would recalculate your taxable income by adding back the non-allowed expenses, reassess your tax liability upwards, and apply late payment interest. In addition, fixed penalties may apply. The total cost can become significant.
3.2 Income to be considered under the “régime réel foncier”
This includes rental income (rents) or agricultural lease income (“fermages”) that have actually been received, as well as certain ancillary income.
“Fermage” refers to income derived from leasing agricultural land or a farm operation, for example if you have purchased a farm and rent it out as a landlord.
- The security deposit paid by the tenant when moving into the property is not taxable at the time it is received, as it is merely a deposit and not rental income. However, it may become taxable if, when the tenant leaves, damage has been caused to the property and you retain all or part of the deposit. In that case, the deposit is no longer a deposit but effectively becomes income that you are entitled to keep, and it is therefore taxed like rent. On the other hand, if you return the deposit at the end of the tenancy because no damage has occurred, then it is obviously not considered taxable rental income. Thankfully!
- In France, certain expenses related to real estate are typically borne by the owner, while others are borne by the tenant. For example, property tax (“taxe foncière”) is usually the responsibility of the owner. However, if the owner asks the tenant to reimburse this tax, then the reimbursed amount becomes taxable and must be declared as rental income.
- Certain insurance indemnities received to compensate for damage to the property must also be declared and taxed as rental income.
3.3 Deductible expenses under the “régime réel foncier”
Remember the general principle mentioned earlier: in principle, deductible expenses are those incurred to acquire or preserve rental income (“revenus fonciers”).
However, there is a specific list of expenses that are always allowed as deductions, as well as a list of expenses that are explicitly excluded from deduction (blacklist).
3.3.1 Main deductible expenses listed by the French tax authorities
| Expense Type | Details |
|---|---|
| 1 - Management fees | Remuneration of concierges, fees paid to a real estate agency for managing the apartment, legal procedure costs related to the rented property, fees paid to a tax consultant to file your annual rental income tax return - Form No. 2044 |
| 2 - €20 flat deduction | A flat deduction of €20 per apartment automatically accepted by the tax authorities. This flat amount mainly compensates for correspondence and telephone expenses. |
| 4 - Insurance premiums | They must relate to the rented properties. |
| 4 - Co-ownership charge provisions | If paid by the landlord. |
| 5 - Eviction indemnity | If the landlord wishes to recover the property and this is provided for in the lease, the landlord must pay an eviction indemnity to the evicted tenant. This indemnity paid is deductible from rental income. |
| 6 - Maintenance and repair expenses | These are only works that maintain or restore a property to normal use without modifying its initial structure or layout. Further details are provided by the tax authorities regarding deductible or non-deductible repair expenses here: BOFIP |
| 7 - Improvement expenses | Aimed at adding new equipment or comfort to a property WITHOUT MODIFYING THE STRUCTURE OF THE BUILDING, e.g. installation of a bathroom. Once again, to ensure deductibility of this type of expense, refer to the BOFIP here: BOFIP. In principle, these expenses are deductible if they are carried out in premises used for residential purposes at the time of the work. |
| 8 - Loan interest and application fees | If the loan was taken out for acquisition, repair or improvement under the conditions explained above, then the related interest is deductible and reduces the taxable rental income. Application fees and insurance premiums related to these loans are also deductible. |
3.3.2 Expenses NEVER deductible from rental income (“revenus fonciers”) as listed by the French tax authorities
| Expense Type | Details |
|---|---|
| 1 - Repayment of loan principal |
The repayment of the capital portion of a loan used for acquisition,
repairs, or improvements is never deductible. Only interest is deductible,
not the capital repayment. This must be carefully considered, as capital
repayments are often a significant expense.
If capital is not deductible, you may end up paying tax on a
“fictitiously” high rental income.
For example, even if you receive €500 in rent and repay €550 of loan instalments, if €50 are interest and €500 are capital, the tax result will be calculated as follows: €500 (rent) – €50 (interest) = €450 taxable income. You will therefore be taxed and subject to social contributions on a €450 profit, even if in reality you are making a loss (rent €500 vs loan repayment €550). |
| 2 - Construction, reconstruction and extension works | These works are never deductible from rental income (for "revenus fonciers" category). |
| 3 - Improvement expenses in certain cases | If these expenses are carried out in premises that were not used for residential purposes at the time of the works, they are not deductible. |
| 4 - Depreciation (amortisation) | Under the “revenus fonciers” regime described in this article, it is not possible to deduct depreciation of real estate assets from taxable income. This is a major limitation, as depreciation can significantly reduce taxable income, often bringing it close to zero. Depreciation is not allowed under rental income rules, but is permitted, for example, in a corporate structure such as an SCI subject to corporate tax (IS). This is why obtaining proper advice before starting an investment can be highly valuable. |
| 5 - Social contributions treatment | Social contributions are calculated on net rental income (rents minus deductible expenses), but they are not deductible themselves. In other words, once social contributions are calculated (e.g. €1,000), you cannot deduct this amount from rental income to reduce the taxable base for income tax purposes. |
4 – Rental Income Tax Result (“Résultat Fiscal Foncier”)
The taxable rental income (“résultat foncier”) subject to both income tax and social contributions corresponds to the result obtained after deducting all expenses admitted under the rules explained in the sections above from total rental income.
5 – Rental Deficit (“Déficit Foncier”)
5.1 What is a rental deficit?
Under the micro-foncier regime, it is not possible to generate a rental deficit. Indeed, as explained earlier, the micro-foncier regime only allows a flat 30% deduction on rental income. The taxable and social contribution base is therefore always calculated on rental income reduced by 30%.
Since only a 30% deduction is allowed, it is impossible to create a negative result. Even if you receive €10 in rent, €10 minus 30% will still result in a positive taxable amount. Therefore, the concept of a rental deficit is not relevant under the micro-foncier regime.
Under the “régime réel foncier”, however, this concept becomes fully relevant. Indeed, a rental deficit can be generated when deductible expenses exceed rental income, for example in a year where significant maintenance or repair works are carried out that exceed the rental income received.
In such a case, the calculation (rental income minus deductible expenses) may result in a deficit. Not only will you pay no income tax or social contributions for that year, but under certain conditions explained below, this deficit may be carried forward and offset against your overall household income, thereby reducing your total taxable income.
5.2 What are the limits of the rental deficit?
A - Rental deficits generated exclusively by loan interest
A rental deficit created solely by loan interest cannot be used or carried forward against your overall household income in order to reduce your taxable base.
Example: rental income €10,000, loan interest €11,000.
€10,000 - €11,000 = -€1,000. This -€1,000 is indeed a deficit,
but it cannot be offset against salary income to reduce your taxable base.
The reason is that the French tax authorities allow loan interest deductions, but aim to prevent situations where high-interest borrowing could fully eliminate taxation. Indeed, if deductible interest is too high, the taxable result becomes zero or negative, meaning no tax can be collected. In addition, if such a deficit could be offset against salary income, it would also reduce tax on employment income (salary), which the tax authorities seek to limit.
Taking the previous example, if you also have €5,000 of additional deductible
expenses during the year, the calculation becomes:
€10,000 rental income - (€11,000 interest + €5,000 expenses) = -€6,000 deficit.
However, since €1,000 of this deficit is attributable to loan interest,
you will only be able to carry forward €5,000 against your salary and overall income.
Therefore, if you have loan interest included in your deductible expenses,
you should always calculate as follows:
Rental income minus loan interest first.
You then check whether a deficit already exists, and then continue the calculation
by deducting other eligible expenses, as shown in the example.
B – Overall limitation of €10,700
The rental deficit that can be offset against your salary and overall income is limited to €10,700 per year, even if the deficit is fully deductible and does not include loan interest.
Example: rental income €10,000, deductible expenses €30,000 → deficit = €10,000 – €30,000 = –€20,000. You will only be able to offset €10,700 against your salary and overall income, as expressly provided by French tax rules. The remaining unused portion (€20,000 – €10,700 = €9,300) cannot be offset against salary income but can be carried forward and deducted from rental income generated over the next 10 years.
6 – “Régime réel foncier” and social contributions
The rules are the same as for rental income under the micro-foncier regime. You pay social contributions at a rate of 17.2% on your rental income result, calculated according to the rules explained above. The 17.2% rate is identical to the one applied under the micro-foncier regime.
FINAL EXAMPLE – “Régime Réel Foncier”
Assumptions:
You live alone, have no children, and earn a total of €50,000 in net taxable salary income in France. Under the French 10% standard deduction applied to salaries, you are taxed on €50,000 minus 10% (€5,000), meaning €45,000 of taxable salary income is subject to the progressive tax brackets.
You do not receive any pension or other income from your home country.
You own 5 rental properties and receive €30,000 of net rental income (“revenus fonciers”), meaning rental income after deductible expenses.
You automatically fall under the “régime réel foncier” (as your rental income exceeds €15,000).
From a tax perspective, your net rental income (€30,000) will be added to your taxable salary income (€45,000), and the total will be taxed according to the progressive income tax brackets.
From a social contributions perspective, you will pay 17.2% on your net rental income (€30,000), in accordance with the “régime réel foncier”.
REMINDER: expenses that are never deductible under the “régime réel foncier” include:
- Repayment of loan principal
- Depreciation (amortisation)
- Social contributions
- Construction – reconstruction – extension works
- Improvement expenses if carried out in premises that were not used for residential purposes at the time of the works
| Breakdown | Amount |
|---|---|
| Gross rental income | €50,000 |
| Loan repayment on the property | Not deductible for the real estate income tax calculation |
| Boiler maintenance | €5,000 |
| Bathroom renovation | €6,000 |
| Management fees | €3,000 |
| Insurance premiums (related to rented properties) | €2,000 |
| Loan interest | €900 |
| Garage construction | Not deductible for the real estate income tax calculation |
| €20 flat deduction per property (5 × €20) | €100 |
| Property tax | €3,000 |
| Net rental income (“revenus fonciers réels”) | €50,000 - €5,000 - €6,000 - €3,000 - €2,000 - €900 - €100 - €3,000 = €30,000 |
| Social contributions (17.2%) | 17.2% × €30,000 = €5,160 |
| Total taxable base | €45,000 salary income + €30,000 rental income = €75,000 |
| Income tax (salary + rental income combined) --> (See * below the example table for calculation details) | €15,604 |
| TOTAL TAX BURDEN | €5,160 + €15,604 = €20,764 |
* According to the progressive income tax brackets table recalled below:
(€75,000 - €29,580) × 30% + (€29,579 - €11,601) × 11% + (€11,600 - €0) × 0% = €15,604
Table - Progressive Income Tax Brackets Applicable to 2025 Income
| Income Brackets | Tax Rate |
|---|---|
| From €0 to €11,600 | 0% |
| From €11,601 to €29,579 | 11% |
| From €29,580 to €84,577 | 30% |
| From €84,578 to €181,917 | 41% |
| Above €181,917 | 45% |
Conclusion
When you rent out an unfurnished property (without furniture) and purchase it in your own name (not through a company subject to corporate tax), you fall under the French rental income regime (“revenus fonciers”).
Within this regime, there are two systems: the micro-foncier and the régime réel foncier. You automatically fall under the micro-foncier regime if your total rental income is below €15,000 per year. Above €15,000 of rental income, you automatically switch to the régime réel foncier.
Tax declarations differ depending on whether you are under the micro or real regime.
The French tax authorities generally allow taxpayers to move from a lower regime to a higher one upon request (for example from micro-foncier to régime réel). However, once you are required to fall under the higher regime by law (for example because you exceed the threshold), you can never choose to remain in the lower regime.
Under rental income rules, whether you are under the micro or real regime, you pay both income tax and social contributions. Social contributions are exceptionally the same in both cases, at a rate of 17.2%.
Finally, under the rental income regime, certain expenses are never deductible. Some taxpayers sometimes try to deduct these expenses artificially in order to reduce their tax liability and are later subject to tax audits and significant penalties. French case law on rental income taxation is extensive in this area.
Strategic Summary - If You Only Read This Section
- Unfurnished rental income in France (“revenus fonciers”) applies when you rent out property in your own name or through an income tax (IR) entity such as an SCI, provided the activity remains civil and non-commercial.
- If your annual gross rental income is below €15,000, you automatically fall under the micro-foncier regime. Above this threshold, you automatically switch to the régime réel foncier.
- You can opt for a higher tax regime (e.g. micro → réel), but you cannot choose to stay in a lower regime once you are legally required to move up.
- The micro-foncier regime applies a flat 30% deduction on rental income, meaning no actual expenses can be deducted, even if they are significant.
- The régime réel foncier allows deduction of actual expenses, but only if they are eligible, paid during the tax year, and directly linked to acquiring or preserving rental income.
- Social contributions are applied at a flat rate of 17.2% in both micro and real regimes, on the taxable rental income base.
- Some expenses are never deductible (e.g. loan principal repayment, depreciation, construction works), and attempts to artificially deduct them can lead to tax reassessments, penalties, and interest charges.
