Earning a Living

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AE & taxes

Hi.

I am trying to calculate an estimated income for our soon to be B&B business venture in 36.  I have searched and read for about 30 minutes and found that 23% seems about the going rate for AE tax, hope I am getting this right?  I just want to confirm exactly what %age I am likely to be left with after taxes and deductions, is the 23% it or will there be income taxes on top?  We will eventually have 3-4 rooms.

Ooooh, just another thought for those of you that might have had some experience.  Habitation taxes, will they change if the property is to be used as a B&B?

Thanks in advance.

Ian



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Re: AE & taxes

Although not involved with B&B business I have been involved in the gite letting business for a number of years and my understanding is that if you offer food - ie. B&B - then you have to register for TVA. That could open up a whole bag of worms !
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Re: AE & taxes

Do you have a source for that 'understanding'?

It certainly goes against the experience of many people (us included) that tax from a B&B business is taxable under a micro regime - as long as it comes under the statutory turnover limit - and thus is specifically excluded from TVA.

The 23% figure mentioned in the original question includes tax (at 1.7%) as well as cotisations at 21.3%, which applies to a service industry (i.e. 'prestations de service') under the BIC regime. My understanding is that several people have claimed the lower rate for gites and B&B, under 'ventes de marchandises (BIC)', which is 12% (13% with tax included).

Note that these rates apply to turnover, not profit, so no other costs can be offset. If you have a large number of properties that you are renting out then you may well do better to go for a 'réel' regime where you can offset all your allowable costs and expenses and benefit from charging and recovering TVA,  

You can opt for payment of tax with your monthy or quarterly declaration under the autoentrepreneur/micro social regime as above. However, if your income is low so you are not actually liable to pay income tax in France it is pointless opting to pay it; and if your income is above a certain level you cannot pay this way, you have to add the income to your normal tax return.

Source

 


Will

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Re: AE & taxes

As I understand it you would need a food hygiene course certificate at lots of Euros if serving hot food, breakfast is ok..


Thanks for the info Will, so it looks like if I base my calcs on 23% then I should be ok, anything less would be a Brucy BonusBig Smile [:D].

We (me to be honest) are thinking of another property close by that would make a great home with potential for a gite and to rent the house out peak season.  I think we probably would need more rentals to get enough of an income to live, I am not after large sums, just enough to feed our selves and pay bills.

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Re: AE & taxes

<BLOCKQUOTE><table width="85%"><tr><td class="txt4"><img src="/cs/Themes/default/images/icon-quote.gif">&nbsp;<strong>Will wrote:</strong></td></tr><tr><td class="quoteTable"><table width="100%"><tr><td width="100%" valign="top" class="txt4"><P>Do you have a source for that 'understanding'?</P>
<P>It certainly goes against the experience of many people (us included) that tax from a B&B business is taxable under a micro regime - as long as it comes under the statutory turnover limit - and thus is specifically excluded from TVA.</P>
<P>The 23% figure mentioned in the original question includes tax (at 1.7%) as well as cotisations at 21.3%, which applies to a service industry (i.e. 'prestations de service') under the BIC regime. My understanding is that several people have claimed the lower rate for gites and B&B, under 'ventes de marchandises (BIC)', which is 12% (13% with tax included).</P>
<P>Note that these rates apply to turnover, not profit, so no other costs can be offset. If you have a large number of properties that you are renting out then you may well do better to go for a 'réel' regime where you can offset all your allowable costs and expenses and benefit from charging and recovering TVA,  </P>
<P>You can opt for payment of tax with your monthy or quarterly declaration under the autoentrepreneur/micro social regime as above. However, if your income is low so you are not actually liable to pay income tax in France it is pointless opting to pay it; and if your income is above a certain level you cannot pay this way, you have to add the income to your normal tax return.</P>
<P><A href="http://www.lautoentrepreneur.fr/images/1363-PtSur-AutoEntrepr-juillet10.pdf">Source</A> </P>
<P> </P></td></tr></table></td></tr></table></BLOCKQUOTE>
As regards the TVA the "understanding" comes from a booklet, in French, from the French Tax authorities - Ref GP 178 dated March 2009 - page 9 to be precise !
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Re: AE & taxes

halfblind

No need to gtet shirty and use !!!!!!!!!!!!!!!!!!!s  Big Smile [:D]

This forum has a tendency to routinely ask for a source when phrases such as "I heard it down the pub" are used. That way the information given gains some creedence.




Benjamin

A MEAL WITHOUT WINE IS CALLED BREAKFAST


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Stick out tongue [:P]

Re: AE & taxes

OH dear, one exclamation mark and you have a wobbly - get a LIFE - yes I know "capitals".
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Re: AE & taxes

I don't disbelieve you, but I can find no reference to that particular booklet (GP 178) on any of the impots websites; indeed the official guide (http://doc.impots.gouv.fr/aida/brochures_ir2010/) about taxation of furnished property income makes no reference as far as I can see to charging TVA if serving meals.

Where is somebody like Quillan with current experience of serving meals at a B&B?

Edit: The Autoentrepreneur guide (see my 'source' in previous post) says:

Attention : certaines activités sont exclues du régime fiscal de la micro-entreprise et par conséquent du régime auto-entrepreneur.

Sont notamment concernées, les activités relevant de la TVA immobilière (opérations de marchands de biens, lotisseurs, agents immobiliers, opérations sur les parts de sociétés immobilières), les locations d’immeubles nus à usage professionnel, certaines activités commerciales ou non commerciales comme la location de matériels et de biens de consommation durable.

So for just a normal B&B rather than a professional property rental business, AE would seem to be fine, and as you cannot charge/recover/register for TVA as an AE it would seem to follow that the requirement to operate under the TVA regime doesn't apply.


Will

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