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Anyone phoned tax office for exchange rate yet?


milkeybar kid
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I don't know why this always gets so complicated.....

I submitted an on-line request via the main Impots 'contact us' webpage asking them to confirm what the allowable average exchange rate is for 2008 revenus étrangers.

The reply came back in a hour in the form of an e-mail from the Direction Générale des Finances Publique reiterating the standard daily rate procedure, but confirming that for practical purposes, it is permitted to use an average rate.  For sterling, the approved rate for 2008 is 1,049868766.

Simple request, simple reply, 100% official and binding - now printed out and clipped to my personal tax file.....[;-)]

 

 

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[quote user="Sunday Driver"]

For sterling, the approved rate for 2008 is 1,049868766.

Simple request, simple reply, 100% official and binding - now printed out and clipped to my personal tax file.....[;-)][/quote]

Crikey, what a beneficial rate for us Brits.

I usually email my tax office in the same way as you and stick with whatever they say. Last year they told me the average was 1.4264 so that is what I used. But after your reply I am feeling reluctant to do that this year in case they say something horrendous like 1.25. [:-))]

Sue

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I do have one small problem with all this (ie taking a rate from the tax authorities, rather than sticking to the letter of the law) - and that is, what happens when the reverse is true and the rate from the tax office is worse than the correct and legal one?  This could happen as we all know, since currencies do weird and wonderful things all the time.  Will everybody who used the "easy" rate, then be preaching the theoretically correct way all of a sudden?[Www]
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[quote user="Sunday Driver"]The reply came back in a hour in the form

of an e-mail from the Direction Générale des Finances Publique

reiterating the standard daily rate procedure, but confirming that for

practical purposes, it is permitted to use an average rate.  For

sterling, the approved rate for 2008 is 1,049868766.[/quote]

It was good of them to reply, but I don't think they've clarified the matter: 1.049(...) is not an average rate, not even close to one.  As a matter of fact, we all know it was a year-end rate (the reciprocal of 0.9525, as reported by the Banque de France); perhaps whoever wrote the reply didn't realize this.

So does the answer mean that you may (a) use the daily rate procedure, or (b) use an average rate, or (c) use the approved rate, no matter what it is?

Because of the way sterling moved in 2008, (c) is obviously advantageous and it's nice to have the 1.05 option: but are you required to be consistent?  Suppose that in future sterling

suddenly rises against the euro towards the end of the year (or the

euro collapses against sterling, however you prefer to describe it): can we still pick the rate that suits us best in each year? 

One day the DGFP will get round to answering these questions properly and putting a suitable note into form 2047: it wouldn't be so difficult.  Until then I fear this discussion will be an annual event.

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[quote user="Sunday Driver"]

 an e-mail from the Direction Générale des Finances Publique reiterating the standard daily rate procedure, but confirming that for practical purposes, it is permitted to use an average rate.  For sterling, the approved rate for 2008 is 1,049868766.

[/quote]

What sort of a pedant would issue a figure for conversion running to nine decimal places of a €uro?  [8-)]

Let's say you have £30,000 to convert to €uros. Using the email figure gets you €31.496 whereas using a rounded up conversion figure of 1.05 would get you €31.500.

No contest really.  [:P]

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I don't know why we're all wringing our hands in anguish over this....

The Impots recognise that it's a bit of a job to establish an individual daily exchange rate for foreign income received on a multiple and regular basis over the year so as a concession, they offer the option of using a single composite rate. 

They know that some people will sit down and work it out using both methods and choose the most advantageous - they're not daft.  However, in terms of the impact on overall tax revenue, the difference is totally insignificant.  It's not really that difficult to work out the actual daily rate, so they're basically giving us a bit of a freebie, and if it turns out to be to our advantage this time around, they seem content with that. 

In terms of the rate quoted to me, yes, it's the year end rate - but it's the one they've instructed me to use.  That's why I asked for it in writing.....[;-)]

 

 

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It seems to me that the root of all this debate is the understandable but neo-anal obsession we Brits have with the exchange rate.

I'm sure that the French at large have virtually zero interest in it and if pressed I doubt many could even have a decent stab at what it is let alone know anything about the huge fluctuations it has undergone recently.

In terms of the Impots with 60 million native French tax payers Brits are hardly a blip on their horizon so it's perhaps not too surprising their response to a request for ruling could be to check the day rate and reach for the calculator. I must say though that it is a mystery to me as to what source they could have consulted to come up with 1.04 as it has only ever touched that once at the turn of the year, and then just for a few days, so maybe this is actually a number which has been handed down from above ?

Doesn't the fact that they are even quoting a year average at all imply that they accept the method and the idea of calculating on recipt, as some suggest is the correct way, is not necessary ?

EDIT: Got interrupted writing so apologies for repeating some of what SD has said [:)]

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Just for the record, I have never wrung my hands in anguish over this for one split second.  I do what I'm supposed to do and my tax return takes me about 10 minutes to do.  It's just a case of adding two lots of 13 numbers up (which I make a note of when I'm paid - a couple of minutes twice a month) and bunging them in two boxes on a form on a computer.  It's a complete doddle, imo - not a bit of anguish at all - and to think, I once paid somebody to do it - I must have been nuts[:D].
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""t is a mystery to me as to what source they could have consulted to come up with 1.04 as it has only ever touched that once at the turn of the year, and then just for a few days, so maybe this is actually a number which has been handed down from above ? ""

i *think* it's the Banque de France rate for 31st December (which I believe is used for ISF, so is a figure the Impots would presumably have ready access to).
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[quote user="Sunday Driver"]

If you are concerned that your local tax office may offer you a different rate, why not do as I did and go right to the top.....[8-|]

[/quote]

Or post on a forum and get somebody else to do it for you[:P].

The vast majority of people know exactly what their income was and its euro value, but there are always a few who want to play the system every year, quoting various "official" sources, Forums, newspapers, tax offices etc etc so that they can justify to themselves and their consciences the use of an often spurious exchange rate figure.  Me, I'm re-calculating the rate I am using so that it gives me no tax to pay, so I can claim for my French winter fuel allowance. [:-))][blink]

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I don't think this discussion is evidence of a "neo-anal obsession", as ErnieY so charmingly puts it.  If somebody declares that you can use a year-end rate for the whole year, that is (for 2008) a 20% discount that is nowhere justified by the law.  To put it simply, it seems too good to be true.

Consider two taxpayers, A and B.  Both get the UK state pension, which was (let's say) £6,000 in 2008.  A's pension is paid directly into his euro account.  B receives his in a UK account, and brings money over to France whenever he needs it.    

It's clear that A must declare the actual euros he received, which would have been about €7,470.  However, according to the DG ruling, B can, if he wishes, declare only €6,300.

I do not believe that this gift to "type B" taxpayers was intentional.

 

Before rushing to take advantage of it, it's perfectly reasonable to ask a few questions.  To name only three: "who says we can do this?" and "do we have to use the same method for all kinds of income and all currencies?" and  "if we do it this year, are we committed to do it in future years when it may be a disadvantage?"

The first of these questions was answered by some tax offices, but not all.  Thanks to SD's enquiry, we now know that it's a ruling by the DG, which ought to settle it.

We also now know the answer to Ernie's question -[quote user="ErnieY"]...it is a mystery to me as to what source they could have consulted to come up with 1.04...[/quote]As Juswundrin suggests, it's the inverse of the 31/12/08 figure published by the Banque de France (0.9525) - I think this is evident from the fatuous number of digits that was actually quoted.

But the other questions have not been answered.  The DG's reply to SD is not in fact very clear.  It seems to say that you have three options: (a) to calculate the daily rate for each transaction, (b) to use an average, or (c) to use the stated "approved" rate.  Unless, of course, the person who wrote it thinks that the 1.05 rate is in fact an average - which would confirm my honest belief that the whole thing is the result of a mistake by someone who doesn't really understand either foreign exchange or simple arithmetic.

Like Cooperlola, I am not suffering any anguish, and my hands remain unwrung.  I just think it's a pity that so much time is wasted - by taxpayers and tax office staff - on something that could, and should, be clarified in the instructions.  

By the way, SD: would you be willing to publish the actual text of the DG's reply?  If I am going to have to quote it at some time, I'd rather quote the original.      

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Errrrr, if you dont want to suffer anguish could you not do as SD did and submit an on-line request via the main Impots 'contact us' webpage asking them to confirm what the allowable average exchange rate is for 2008 revenus étrangers.As said in post 09/05/09
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Received this back from our local office so rather shot myself in the foot by asking! Works out as 1.186380354 Euros/Pound a tad below the average rate that other have given. Anyone else had this quoted by the Parthenay office?................JR

 Subject: Réf. : le taux de change
> From: [email protected]
> Date: Mon, 11 May 2009 10:24:15 +0200
>
>
> Nature de la demande : IR autres
> Objet de la demande : Demande d’information pratique ou rendez-vous
> Référence :
> Traité par : Contrôleur principal, SAID
> SUD
>
> Bonjour Madame / Monsieur
>
> Monsieur,
>
> Le taux de change moyen à retenir pour l'année de 2008 est de :
> 1 € = 0.8429 £
>
> Cordialement,
> Contrôleur Principal des Impôts.
>

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There is top and top. Which top is top? It's enough to make one want to top someone.

Here's what I got "from the top". Answer first, question follows.

Nature de la demande : IR revenus

Objet de la demande : Impôts.Gouv

Référence : XXXXXXXXXXX

Traité par : XXXXXXXXXXXX

Bonjour Madame / Monsieur

Bonjour,

lorsque des revenus ont été encaissés en monnaie d'un Etat extérieur à la

zone euro, ils doivent être convertis en euros d'après le cours de l'euro à

la date de l'encaissement. Je vous invite à consulter le site de la banque

de france banque-france.fr qui vous permettra de retrouver les cours de

change quotidiens de l'euro.

______________________________________________________________________

Votre demande :

Madame, Monsieur,

Quel est le taux d'échange (Livre Sterling - Euro) que je devrais utiliser

pour notre déclaration de revenus 2008?

Je vous adresse, Madame, Monsieur, mes salutations distinguées

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So now we have two more official answers in writing, both of which are different from the official answer given in writing to SD.

If I were a troublemaker, which of course I'm not, I would suggest that JohnRoss and Chessfou should write to their respective sources saying "thank you very much for your quotation, but I have been offered a better rate elsewhere."

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If you read para 3 on the front page of that, you'll see that you're allowed to use the *average* of 31/12/07 and 31/12/08; it doesn't say to use the 31/12/08 rate itself.

My departmental Impots have quoted 1.1863, which sounds right-ish (average of 1.0498 and 1.362, I believe it was).

I'd be happy to be corrected if i'm misreading that article.

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Curiouser and curiouser. I read that to mean:

12/2007 Banque de France 0.73335 therefore 1/0.7335 = 1.3636 (which I recall was quoted by some as "the rate" last year)

12/2008 Banque de France 0.9525 therefore 1/0.9525 =  1.0498

so, 1.3636 + 1.0498 = 2.41346  and 2.41346/2 =  1.2067

Think of a number ...

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[quote user="chessfou"]Curiouser and curiouser. I read that to mean:

12/2007 Banque de France 0.73335 therefore 1/0.7335 = 1.3636 (which I recall was quoted by some as "the rate" last year)

12/2008 Banque de France 0.9525 therefore 1/0.9525 =  1.0498

so, 1.3636 + 1.0498 = 2.41346  and 2.41346/2 =  1.2067

Think of a number ...

[/quote]

Which is exactly the formula my tax office said to use when I emailed them at this time last year; so for 2007 I used 1.4264.

I have just emailed them today to ask advice re their interpretation of the rate to use for 2008 and, whatever it is, I will stick to it as they are my tax office.

I am expecting the rate to be 1.2067 as you worked out above.

Just for interest sake I will post their reply when it is received.

Sue

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[quote user="suein56"]

Just for interest sake I will post their reply when it is received.

[/quote]

OK, the reply is in, and - as I expected - they follow the rules and my rate is 1.2067; which is not too bad.

Email received:

Nature de la demande : IR revenus

Objet de la demande : Demande d’information

pratique ou rendez-vous

Référence :

Traité par : Jose

DA-SILVA, 0297015041, Contrôleur principal, cellule csp

Bonjour

Madame

Au 1/1/2008 : une Livre sterling = 1,3636 €

Au

31/12/2008, """"""""""""""""""" = 1,0498 €

Soit un taux moyen de 1,2067. Vous

pouvez utiliser ce taux moyen pour la

conversion de vos

revenus.

Cordialement                                     

M

DA SILVA

Obviously I am getting well known there, as I now rate a 'cordialement' instead of the 'salutations distinguées' I got last year!

Sue [:)]

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It gets better and better!  Now we have a fourth "official" rate, confirmed in writing just like all the others!

The Service des Impôts has really lost its way on this not-very-difficult question.  I am waiting for some official somewhere to tell us officially that you should multiply your sterling income by the square root of your grandmother's birthday.  As long as you have it in writing, you'll be fine.

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Hi I really do not wish to add to this continuing Whitehall farce (sorry that is unappropriate in todays circumstances) but today from my Controler of Impots whom I am seeing tomorrow I have received an email saying to use 1.11. Where this comes from I do not know so please no arrows to come my way.

I am no angel but in my business as in the law and equally having had drummed into me by my late Welsh miner Father the differences between right and wrong I truly do not know which way to go. I will not go 1.04 that is for sure.

Tonight I will try to sleep on it and then report back tomorrow and following my meeting.
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Surely the tax offices are just answering the questions asked of them

1)  Q - What rate do I use for income regularly received from the UK?

     A - The rate on the day received

2)  Q - What rate do I use for income taken from the UK by way of cash withdrawals.

     A - You can use the average rate of 1,2067 € 

3)  Q - I receive a pension/annuity/ payout at the end of the year

     A - You use the end of year rate of 1.04€

How much simpler can it be???

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