EPRA – PwC. Total Tax Contribution of Real Estate Investment Trusts in Europe

Real Estate Investment Trust (REIT) are the guardians of our cities’ high quality assets, covering all types of real estate assets, from offices to retail, and increasingly healthcare and retirement facilities. They are also great contributors to GDP and to society as they represent hundreds of thousands of jobs in our continent. In Europe, no less than fourteen EU member states have introduced REIT legislation with an effective tax passthrough to incentivise real estate investment. With withholding taxes deducted from dividends, but also on employment and on property ownership, there is limited visibility over the tax contribution paid by REITs. But then, how and how much do REITs contribute in taxes to the public finance in Europe?

In partnership with PwC, EPRA conducted the first Total Tax Contribution (TTC) study
amongst its membership. The study revealed that the TTC and other payments to government in Europe is estimated to be €4.1 billion, comprising €1.7 billion in taxes borne, which are a cost to the REITs, €2.3 billion in taxes collected on behalf of tax authorities and €100 million in other payment to governments. As a whole, the study has gathered evidence-based data that for every €100 of turnover, an amount equivalent to €32.8 is contributed in taxes.
Amid the COVID-19 crisis and at a time when corporate taxation is under increasing
scrutiny, real estate can be viewed as an easy target for tax intensification given the long-term nature of real estate investment. To this end, we hope that the TTC study will provide a useful and objective source of evidence to improve awareness of
REIT regimes and their tiered contribution for a constructive and active participation in the debate.

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