Corio has opted for nearly its complete French portfolio for the tax regime applicable to Sociétés d’Investissement Immobiliers Cotées (SIIC) as of 1 January 2005.
Under this regime the company will benefit (under conditions) from a tax exemption for both rental income from French properties as well as for capital gains on sale of French properties.
The SIIC regime is comparable to Corio’s status as a Fiscale Beleggingsinstelling (FBI) in the Netherlands. One requirement of the intended change to the SIIC regime is for Corio N.V. to have a listing at Euronext Paris next to the existing listing at Euronext Amsterdam. As from 22 December 2004 Corio N.V. will get this listing.
As of 30 September 2004, the total value of the French portfolio reduced with the sales during the fourth quarter 2004 amounted to € 888 million. The SIIC regime will apply to € 886 million of the French portfolio. The change to the SIIC regime will entail a one time tax liability of 16.5% (exit tax) on the difference between the 31 December 2004 market value of the French portfolio and the fiscal book value of this property. This exit tax is expected to amount approximately € 28 million, payable in four annual instalments. The first instalment is due in December 2005. The portfolio for which the SIIC regime will be applicable will also result in a release of a provision for deferred tax (sum of passive and active liabilities) of € 16 million. The net effect of € 12 million
will be charged to the indirect investment result of 2004.