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De-registering for TVA?

Daft Doctor

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Hi, when we bought our apartment it was leased back commercially to a holiday company, and in order that they could reclaim the TVA compulsorally levied on their rental payments to us, as a condition of the lease we had to voluntarily register for TVA, even though the income we received was way below the turnover threshold for such registration.  The management company have since hit financial difficulties and the leases have been cancelled.  As such we are now self-managing our apartment for holiday lets. 

As I said above, our income from lettings will be nowhere near the french TVA threshold, so I wondered if anyone out there knew anything about the procedure for de-registering for TVA?  We know that this cannot happen in 2013 but we are thinking of 2014 onwards.  If anyone has any sage knowledge, advice or experience I'd be most grateful.  [:D]


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I don't understand what you mean by "TVA compulsorily levied on their rental payments to us". TVA is not levied, it is charged by whoever writes the invoices if they are registered for TVA.

We rented an apartment for years to a French holiday company, a subsidiary of Brittany Ferries, and I was very pleased that TVA was not involved, as it had been in a similar situation in Spain, with the resulting complications.



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Hi Nomoss, sorry I was a bit vague, perhaps it's because I don't fully understand the nuiances of it myself.  Our apartment is in a Residence de Tourisme, which must provide other services to guests rather than just accommodation, such as cleaning, linen provision, reception services, etc.  This 'RdT'status I think means that rental payments must ordnarily be subject to TVA.  As you say however, this can only be so if those receiving the payments are registered for TVA.  How exactly this affected the management company financially I'm not so sure, but that was the way it was. 

My worry is that even though we no longer have a lease in place and our guests do not have access to all the RdT services, if we are still TVA registered we may have to deduct and pay over TVA from the private rentals we receive, even though we are nowhere near the threshold for doing so.  Hope that is a little clearer, thing is does anyone know if or how you go about deregistering for TVA in France?  

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Hi BJSLIV, no, not really.  Another management company is going to take over and will be offering new leases, but we have decided not to renew that arrangement.  We now live in the same town as the apartment, so we can do all the meeting and greeting, cleaning, linen changes, etc, as well as making the apartment a little more personalised and less corporate.  I think approx 85% of the owners will however take up the new lease offer. 
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When looking at TVA regulations in France I came across the site below, containing the information which follows (under "Registration")



Who is required to register for French VAT?

French Entities

If a business makes taxable supplies in France for which it is liable to pay VAT or to VAT/Intrastat formalities it will be required to register and account for French VAT. However, entities established/incorporated in France may be exempted from registration if their supplies were, the previous year, less than (amounts tax excluded) EUR 32,600 or EUR 34,600 (but under condition that N-2 was less than EUR 32,600) in respect of services or EUR 81,500 or EUR 89,600 (but under condition that N-2 was less than EUR 81,500) in respect of goods.

To commence an activity in France, every entity needs to have a SIRET number. When a business files the M0 form (declaration of existence) for its commercial registration, the entity is also given a VAT registration number. Therefore, in this way, French businesses are automatically registered for VAT in France.

From which it appears that you automatically became VAT-registered when you appied for a SIRET.

You possibly had no need to do this, as you could probably rent out your apartment under the appropriate regime ( micro-BIC or micro-foncier) without reaching the income ceiling obliging you to register as a business.

Notes on those regimes here, but I'm sure someone on this forum can give more precise advice. http://www.sykesanderson.com/Service_France/articles/french_micro_foncier.asp

In any case, it would seem that in order to "de-register" from VAT you will have to de-register your company, or declare it inactive.


I found the information below on doing this, but again, I'm sure others on here can give first-hand information.


6.4. Cessation of Business Activities

If you decide to terminate the business, then you need to go along to the Centre des Formalités des Enterprises (CFE), or send them a letter/e-mail, advising of the date your business ceased trading.

The CFE will then notify the various social security agencies, but you would be well advised to also drop them a line yourself as there is often administrative delays and errors.

Similarly, within 60 days of ceasing trading you should also notify your Centre d'Impôts, to whom you should also supply trading information to enable them to calculate your tax liability. This practice is variously operated across the country, with some offices prepared to await the normal submission of your annual income tax return. You need to ask.



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I think it's a tax lawyer , rather than an accountant that is needed. If you opt out of the lease-back type of arrangement depending on how long ago you purchased, you risk having to repay the VAt that you reclaimed at the time of purchase.
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DD, you didn't mention anything about your having reclaimed VAT on the apartment as part of the leasing arrangement.

Also, did you buy the apartment personally, or through a company?

If either of these is the case you probably need professional advice as suggested.

I'm not sure, though, that "opting out" is the correct term, as you said that the leases have been cancelled, which in itself might involve some VAT liability



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