TVA on Gite Rental

[The Riff-Raff Element]

We met with our accountant earlier this week to discuss changing

buisness regime (we are currently running under a micro BIC regime, but

cannot continue with this). However we change, in the future we will be

"charging" TVA on our rentals and remitting it (less any deduction on

TVA paid on expenditure) to the mighty organ that is the French state.

I had assumed that we be billing this at 19.6%. However, our accountant

(a shifty little blighter who wears a trilby and camel hair coat,

summer and winter) thinks that the applicable rate for "hérbergement"

may actually be 5.5% with other services (linen hire - not that we do-

meals, cycle hire, etc) being liable at the higher rate.

He admits that he is not certain as he has not been in this situation

for some time and will need to consult one of his august colleagues

(another shifty little blighter with a pencil moustache and a side line

selling (wholesale and retail)  items of ladies intimate apparel)

and get back to us "in due course" ie sometime in the next month.

I know that campsites charge TVA at 5.5% (and I have the bills to prove

it), but has anyone heard of gites being subject to the same? Sounds a

bit good to be true to me, but if this is the case I could probably

afford to completely re-vamp the contents of my sock draw and buy two

(maybe even three if Leclerc are doing a special) new pairs.

[Eslier]

I looked into this earlier in the year as we have come very close to the TVA threshold this year. I also had a similar non difinitive response from our accountant.  In the end, rather than ask our accountants to investigate further, I decided that I didn't want to register for TVA  (we are already on the régime réal anyway so that wouldn't have been a problem)  this year and we have deliberately kept our income to just under the 70k€ threshold.  We wouldn't have gone over by more than a couple of thousand anyway so it isn't a problem.   Next year, we might not have a choice but it isn't necessary to register for TVA until the actual month that you go over the threshold so by then we should be well into the peak rental season.

When you find out for certain (if there is such a thing as a definitive answer in France !) then I would be very interested to know what it is.

[The Riff-Raff Element]

I'll let you know when I find out. I have a feeling that this is not a

particularly common situation, hence the lack of clear information, but

it must have occured in the past and there must be rules somewhere. I

think that our bod is planning to write to the fiscs for a

clarification. I've done a pile of searches on the old www, but

practiacally everything that comes up is about TVA on buildings to be

used for accommodation - not entirely helpful!

If the rate really is 5.5% it would certainly make choosing a  regime more interesting...

[nimportequoi]

[quote user="Eslier"]I looked into this earlier in the year as we have come very close to the TVA threshold this year. I also had a similar non difinitive response from our accountant.  In the end, rather than ask our accountants to investigate further, I decided that I didn't want to register for TVA  (we are already on the régime réal anyway so that wouldn't have been a problem)  this year and we have deliberately kept our income to just under the 70k€ threshold.  We wouldn't have gone over by more than a couple of thousand anyway so it isn't a problem.   Next year, we might not have a choice but it isn't necessary to register for TVA until the actual month that you go over the threshold so by then we should be well into the peak rental season.

When you find out for certain (if there is such a thing as a definitive answer in France !) then I would be very interested to know what it is.
[/quote]

Well done both of you, it is proof that you can make a decent income from gites! Eslier, can I just say that if you need any help in deliberately keeping your income below the 70k€ threshold, I'm not far away and will happily take on any of your bookings that take you over the limit [;-)]

[Cassis]

If I can confuse matters further, according to the Gites de France guide to setting up gites and chambres d'hôtes, then TVA is not applicable on rental of furnished properties.  It's on page 29-30 of the guide (page  31 of the .pdf file).

guideducreateur

[The Riff-Raff Element]

[quote user="SusanAH"]

Well done both of you, it is proof that you can make a decent income

from gites! Eslier, can I just say that if you need any help in

deliberately keeping your income below the 70k€ threshold, I'm not far

away and will happily take on any of your bookings that take

you over the limit [;-)]

[/quote]

Oh the revenue side has been just peachy. It's the bit that's left when

we've taken of the operating expenses, social contributions, capital

items, reserve funds, etc that I could do with improving! Ends meet at

19.6% TVA (boy am I pleased I wrote a business plan all those years

ago), but at 5.5%....socks could be but the first in a long line of

improvements in personal grooming.

Still nothing back from our spiv-like book-cooker. I can almost hear the head scratching from here.

[Jo Taylor]

Unfurnished rentals are generally exempt from VAT (TVA – taxe sur la valeur ajoutée), as are most furnished rentals, as long as your business is under the MicroBIC tax regime.

If you’re running a B&B business with income exceeding €76,300 and are consequently not under the MicroBIC system, your income may be subject to VAT. This applies if you offer "hotel" services, namely three or more of the following: bed linen, reception, daily cleaning and breakfasts.

This means that a B&B business (generating over €76,300) is almost certainly subject to VAT, whereas most gite businesses are exempt.

If your business is subject to VAT, the accommodation itself is taxed at 5.5 per cent and other services (e.g. meals) at 19.6 per cent. You will need to take advice from your accountant as to whether you must charge VAT.

[Cassis]

I wonder how many B&Bs generate over €76,300? [blink] 

[The Riff-Raff Element]

[quote user="Jo Taylor"]

Unfurnished rentals are generally exempt from VAT (TVA – taxe sur la valeur ajoutée), as are most furnished rentals, as long as your business is under the MicroBIC tax regime.

If you’re running a B&B business with income exceeding €76,300 and are consequently not under the MicroBIC

system, your income may be subject to VAT. This applies if you offer

"hotel" services, namely three or more of the following: bed linen,

reception, daily cleaning and breakfasts.

This means that a B&B business (generating over €76,300) is

almost certainly subject to VAT, whereas most gite businesses are

exempt.

If your business is subject to VAT, the accommodation itself is

taxed at 5.5 per cent and other services (e.g. meals) at 19.6 per

cent. You will need to take advice from your accountant as to whether

you must charge VAT.

[/quote]

Thanks Jo - You've matched up exactly with what our accountant thought

was the case. He is, as I mentioned, getting clarification and

something in writing (so valuable!) from the powers that be. This could

really change the complexion of TVA registration for quite a lot of

gite owners, particularly for those getting a lot of building work

done...

[Miki]

[quote user="Cassis"]I wonder how many B&Bs generate over €76,300? [blink] 

[/quote]

Chance would be a fine thing ! We haven't got a plastic bin big enough anyway [:)]

[Cassis]

And Miki's mattress is already overstuffed, I imagine. [:)]

[quote user="Jon D"]

Thanks Jo - You've matched up exactly with what our accountant thought

was the case. He is, as I mentioned, getting clarification and

something in writing (so valuable!) from the powers that be. This could

really change the complexion of TVA registration for quite a lot of

gite owners, particularly for those getting a lot of building work

done...

[/quote]

It also matches up with the Gites de France guidelines.

[Miki]

Ah but those lovely old Francs were so much more comfy, these new fangled Euros don't half stick in the tender bits [:)]

[Jo Taylor]

[quote user="Miki"]Ah but those lovely old Francs were so much more comfy, these new fangled Euros don't half stick in the tender bits [:)]



[/quote]

[:'(][:$]