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European REITs responsible for €4.1 billion in tax

European real estate investment trusts (REITs) are estimated to have been responsible for a total tax collection of €4.1 billion (£3.7 billion) last year, according to new research published today by the European Public Real Estate Association (EPRA).

The report, which included all 98 REITs from the EPRA membership and was conducted in partnership with PwC, is the first of its kind and aims to dispel misconceptions of the sector as a low tax-contributor in Europe.

The study found that the average contribution from each European REIT was equivalent to €0.33 in tax paid for every €1.00 of turnover, or a third.

Additionally, more than two fifths (44%) of the total tax generated were taxes borne by the company, rather than collected from employees, shareholders and customers. Of taxes borne, more than half (62%) were generated by property taxes, totalling €883 million (£795 million), arising either from the occupation or, less commonly, the sale of property assets.

Of taxes collected, it is estimated that €683 million (£615 million) of tax was generated from shareholder dividends.

Dominique Moerenhout, CEO, EPRA, said: “The positive financial contribution of REITs to Europe’s social fabric has been a core principle of the listed real estate industry for decades. These entities are serious drivers of tax contributions and REIT legislation can be a fiscally beneficial introduction for any government. Their existence should be celebrated and their license to operate should be extended throughout Europe.”