French Tax system - point me in the right directions?

[marsprincess]

Hi everyone, I have been reading many posts but still am fairly confused about the tax system.

We are looking into purchasing a property in the Gers region to start a bed and breakfast and then once that is established a cooking school.

I am preparing our business plan and have found loads of helpful information on this forum but the one area I am still not sure about is how the tax system works.

If someone could point me in the right direction so I can at least try to understand what type of taxes would need to be paid I would be very grateful. I want to have all of my questions properly formed before meeting an accountant and understand all of my costs before deciding on just how much I can sink into a property.

Thank you for your help and feedback.

[Clair]

For an idea of solicitor's fees, which include taxes, see http://www.anil.org/fr/outils-de-calcul/frais-de-notaire/index.html

For local taxes linked to property ownership, see http://vosdroits.service-public.fr/particuliers/N206.xhtml (translation)

[marsprincess]

Thank you Claire for this - I realize now my question was not clear. I am actually wondering how to calculate the taxes on the income that would be made from the bed and breakfast and eventually the cooking school but not the property. (However, reading through the link you sent I realize there were some factors that I had not taken into account about the house as well.)

Thank you again for your help.

[Will]

For a business in France, you need to budget for about 60% to go out on taxes and cotisations (social security etc payments). It is the latter that is the killer, especially if you employ people. A good accountant, and setting your business up in the right way, will certainly lower this figure, but you are unlikely to get below about 30-40% in total as self-employed, more if you employ any staff.

If your turnover is small, you could opt for auto-entrepreneur or one of the other micro regimes. Beware that these can be rather limiting and because charges are based on turnover rather than profit, you cannot offset your real costs, just a standard percentage. So if you incur a lot of costs in setting the business up or running it you could be worse off. Also, under a micro regime, you could end up paying several thousand euros worth of charges even if you make a loss or a tiny profit.

Maybe not what you wanted to hear, but being in business in France can be burdensome. A lot of people make a success of it, but you need to be fully aware of likely outgoings and set the charges for your services and accommodation accordingly.

If you just plan to do B&B and it doesn't form the major part of your income you should get away more lightly, but a business such as you propose, where the two parts are interdependent and provide a significant part of your living, is likely to be treated as a normal business.

You really must seek professional advice; it is good to see that you will be doing this, it could be very costly not to.

[marsprincess]

Thanks for this advice. I have lived in Switzerland for the past 20 years and the tax system here is so much easier that I am having a hard time trying to get my head around the French tax system which also seems to change from year to year from what I see.

I know I need to seek professional advice but I want to do all of the necessary homework before doing this.

Have a nice day.