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Tax on gite income


Erica
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Dear all,

I'm trying to work out some figures for earnings on a gite business and am finding the tax system a bit confusing. As far as I can understand it, if one sets up the gite business as a Micro Enterprise you pay 50% on 50% of your gross but applying for a "meuble de tourisme" means you pay 50% on only 29% of your gross...

From what I've read in the past, French taxes are astronomical so this sounds a bit too reasonable to be true. Are there hidden taxes I've missed?

If anybody would be kind enough to help explain to a 'gite business novice' I would be very grateful!

Thanks,

Erica
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Thank-you for replying "alittlebitfrench" .

I'm currently trying to work through my figures to see if it's viable. It would be a supplement to my writing and illustration business which although does well, it won't support a family of four alone. If I can make (profit) £10'000 from the gite business a year I'd be happy, just as a top up to my writing/illustration. Do you mean that you think running a gite business as one's only source of income would be suicide? Do you think if it's run alongside another business, (like mine) it could perhaps work better? I'm hoping Chancer can offer some advice too...does anyone know him/her well enough to give them a little nudge this way? Thank-you again :-)
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On micro entreprise, gross and net doesn't really come into it, nor do any accreditations you may have. The only figure that is taken into account is your turnover (ie gross I suppose but irrelevant in fact). Your cotisations (not income tax) are calculated as a fixed flat percentage of turnover. (You wouldn't pay 50 per cent in any case, you would pay either approx 15 or approx 23 per cent, depending which category you are in, but probably 15 per cent for a gite. So on a turnover of 10000€, regardless of what your expenses are and whether out of that 10k you are left with 8k profit or 5k profit, you would pay you would pay around 1500€ cotisations.)

Income tax is a separate issue, don't confuse cotisations with income tax. Cotisations are NIC equivalents and they entitle you to healthcare, pension etc. Income tax is separate. If you register as a micro you can also opt to pay income tax "PAYG", again as a small percentage of turnover (could be around 2 per cent but I can't remember). If you opt not to do this, you declare your income as untaxed in the annual tax exercise, and get a tax bill.

But if you want to take advantage of any other reductions or concessions, you would have to register on a different regime other than micro entreprise.

As said, Chancer is your man for advice on that.

PS just read your second post. If you are registering your other business as a micro under profession libérale, you couldn't set up another micro for the gite - one person can't have more than one entreprise individuelle. You may be able to combine them within one business but you'd need to look into that carefully, there are a few pitfalls that you would need to check.
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Thank-you Eurotrash,

It's slowly starting to come together now in my head, (although it's still seemingly very complicated).

i think the best course of action may be to ask an accountant to analyse my personal situation...

It does seem viable at the moment though as I'm not planning on any borrowings and will have no mortgage...I'll keep plugging away at my plan! Whether Brits will actually have the right to live and work in France after the Brexit and a potential Frexit is another matter! Is there a thread on this subject? I'd be very curious to read it if three is. I have looked but couldn't see one...
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It will depend partly on how you register your other business, and how the respective incomes compare. If the gite income only a very small proportion of total household income, you may not even need to register it as a business, you could just declare the income and pay tax but not cotisations (at least that used to be the case, AFAIK it still is). If you're already paying sufficient cotisations via your other business, it makes no sense to pay more cotisations on the gite income - you wouldn't get any extra benefit from it.
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I am not registered and its my sole income. My previous tax returns showed a tiny teaching income and a larger but still tiny meublée rental income and it was never questioned, I paid 15.5% on 29% of my turnover which makes a marginal rate of 4.5%, a bit better than 50% methinks!!!

 

Maybe they will kick up because last years declaration showed no other income other than the meublée income, this year has been a massive rise in business, this month alone I will turnover twice as much as I did in the whole of 2014 so maybe they will question it next year, I really dont think so though, as long as I consistently carry on putting figures in the boxes that the contrôleur told me to I think it will always pass.

 

Were iIto have asked what should I do to those who are charged with advising "porteurs de projets" I would no doubt be in a very different far more expensive business structure paying lots of charges, accountancy fees and spending all my time on admin to please others.

4.5% really is a bargain [:D] there are impôts to pay also but as they too are only applied to 29% of your turnover and the base level is et quite high you probably wont end up paying much or anything, even at the 20% rate you are only really paying it at 6%

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By the way Erica I have never applied for a classification for my meublées to get the 71% instead of the 50% abattement, I have just declared it on my tax form and I got the 71% abattement automatically, last year there was an extra form which asks for the adresse of the exploitation, with that and the declaration at the Mairie they could work out that i am a meublée and not a CDH and that I am not classified and hence Knock me back to 50% but my bet is that no-one will make the effort. 

In case they do I have redone my declaration at the Mairie as a CDH, no-one at the hôtel  des impôts even understands what meublée de tourisme is, they all tell me that I am a CDH so who am I too argue!

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