Inovalis Real Estate Investment Trust Provides Update on Arcueil Withholding Tax Matter and Appeal

Executive Summary

• The Paris Administrative Court confirmed a withholding‑tax liability for Inovalis REIT of approximately €5.888 million ($9.294 million), covering principal, penalties and interest for the 2017‑2019 tax years.
• The REIT has secured a 12‑month instalment plan from French tax authorities and will need to fund payments using proceeds from planned asset sales or other financing measures.
• An appeal has been filed seeking recovery of €4.116 million ($6.635 million), but the appeal does not suspend the payment obligation and its outcome is uncertain.

Key Details

• Liability Amount: €5.888 million (≈ $9.294 million) – includes principal, penalties, and interest.
• Tax Years Affected: 2017‑2019, relating to a 25% JV interest in the Arcueil property.
• Payment Schedule: Approved 12‑month instalment plan; REIT expects additional late‑payment interest until settlement.
• Funding Source: Anticipated use of proceeds from planned asset sales or other financing arrangements to meet obligations.
• Appeal Claim: €4.116 million (≈ $6.635 million) sought to be recovered based on tax residency documentation for subsidiary CanCorpEurope Luxembourg and partner’s Korean regulated‑entity status.
• Risk Disclosure: No assurance of appeal outcome; the appeal does not suspend payment requirements.

Notable Quotes

• “The judgment underscores the importance of diligent tax compliance across our international portfolio, and we are taking decisive steps to meet our obligations while pursuing a full recovery through the appeal process.” – Stephane Amine, President & CEO, Inovalis REIT.