Accruals or actual basis for French tax?

[Daft Doctor]

Hi

We started to rent out our apartment in France in 2013 and are currently gathering together our income and expenditure figures for the accountant to compile our 2013 French tax return.  We usually take a 25% deposit on reservation, with the balance payable 6 weeks before the holiday starts.  Many of our peak 2014 winter season weeks were reserved and/or paid for in the autumn of 2013, so I wondered if someone with experience would be able to tell me if payments received in 2013 in respect of holidays taking place in 2014 are taxable in 2013 (i.e. on an actual basis) or in 2014 (i.e. on an accruals basis).  Many thanks as always.   

 

[Kong]

Hi

I've no idea what the rules are, but any deposits we get we 'book' to the year the guests come rather than the year actually received. It keeps the bookkeeping simple. However I suspect that logically we shouldn't!

[HoneySuckleDreams]

If you have to refund a deposit in 2014 having already declared it in 2013 - and paid tax on it - how would you go about getting the tax back ?

I would keep it simple and declare on full payment

Edit: I would add that I don't have Gites or anything like that so it was more of just a simple question

[Araucaria]

DD - I should say up front that I don't know the answer, but I hope this will help anyway.

Taking a deposit wouldn't give rise to an accrual of income: that would happen if someone was in your property already but hadn't yet paid the rent. My dim memory of one of the differences betwen the UK and France was that France was much more wedded to a receipts basis - so if in France you hadn't yet received any rent for a lease that had actually started, you wouldn't accrue for it and pay tax on it.

Local tradesmen seemed to work on that basis: I recall one man at least who didn't put his bill in until the first of January, for work he'd done in December, so as to defer the tax by a full twelve months.

I'm pretty sure that if the deposit is - in whole or part - refundable, then you don't need to treat it as income until it stops being refundable. And I'd stick my neck out and say that even if in law the deposit isn't refundable, if in practice you do refund in certain circumstances (to maintain goodwill) you'd still not bring it into account until the guest actually turns up.