Exchange rate for tax.

[David]

Should we be taking a note of the Pound to Euro exchange rate on the 31st December ready for our French tax forms?  If so, where would we be able to get an official print out to attach to the French tax forms?

David

[woolybanana]

Don't worry, they have a working rate.

[mint]

[quote user="woolybanana"]Don't worry, they have a working rate.[/quote]

Which could vary from one tax office to another............................[:D]

[woolybanana]

Nah, it is set by Paris.

[cooperlola]

You can use the FOREX charts to find the rate at any given time/date.  That way, when you do your tax returns, you can check the rate for each time/date you received any money, and make your tax declaration according to the law (which states that the rate you use is that which applied when the money was received.)  But if you feel OK with using the end of the year rate, and your tax office is OK with that, you can do that too![:)]

EDIT : David - thanks for this - glad to get the annual argument about which rate applies started nice and early this time around...[:D]

[David]

That's what I thought too Coops [6].

In any event as the exchange rate is so poor at the moment I was hoping someone would post an official quote from some official document or text book that says you can use the end of year exchange rate, and then I would print this out and attach it to the tax form.  I am sure that somewhere a quote can be found for any rate which suits! [:D]

I did this last year and the local tax office accepted it.  If Paris then decide that this is the wrong rate, at least I can show good intent, show that the local tax office accepted it, and avoid any fines for deliberate evasion of tax.  With the loss in revenue due to government incompetence such as miniscule interest rates on savings, and the plunging pound etc., why pay more tax on UK income than is absolutely necessary?

I really do not want to "roll over" and accept whatever rate the French tax in Paris decide, which undoubtedly would be the best rate to collect the most tax.

David

[suein56]

[quote user="David"]

I am sure that somewhere a quote can be found for any rate which suits![/quote]

Last year I emailed our tax office - which is conversant with the many problems of  UK expats - and the reply I received said to take the official Banque de France rate for 1st Jan add it to the official rate for 31st december and divide by 2. So that is what I did, then I wrote the result with a copy of their email reply on my e-tax form.

Edit: I did this as we do not receive a pension, monthly or otherwise, but various credits at odd times throughout the year so it would be very difficult for us to follow the required legal route of attaching an exchange value to each credit at the actual moment of receipt.

Sue

[cooperlola]

"According to the the French Impots:

Revenus encaissés en monnaie étrangère

Si les revenus ou bénéfices en cause ont été encaissés en monnaie étrangère, ils doivent être déclarés pour leur contre-valeur en euros, calculée d'après le cours du change à Paris au jour de l'encaissement (réception en espèces, inscription au crédit d'un compte, etc.)

So it's the exchange value on the day of receipt."

(Nicked from Mr S Driver)

[parsnips]

Hi,

    I've never sent a print-out of exchange rates with my declaration(in 16 yrs), some income is in € at various rates, and for others I have used my own estimated rates, and lately the "official" rate . All I enter on the 2047,2042 is the final figure in €; I've never been asked for more detail.

As for David's comment that the fisc would choose the rate that gets most tax, last year it was ,at 1.36,one of the lowest rates of the year.

[David]

[quote user="cooperlola"]

"According to the the French Impots:

Revenus encaissés en monnaie étrangère

Si les revenus ou bénéfices en cause ont été encaissés en monnaie étrangère, ils doivent être déclarés pour leur contre-valeur en euros, calculée d'après le cours du change à Paris au jour de l'encaissement (réception en espèces, inscription au crédit d'un compte, etc.)

So it's the exchange value on the day of receipt."

(Nicked from Mr S Driver)

[/quote]

I am sure that is correct, especially coming from you and the infallible Mr. S Driver.  However, haven't the French tax accepted that this can be very complicated and detailed - in other words too difficult for imbeciles like me and the usual tax paying plebs?  Thus it was my understanding that the highly intelligent French tax mandarins, educated at quality lycees, have decided that this might be too difficult for the peasants, and for simplicity accepted that there can be short cuts in adopting an exchange rate? [6]

David

Edit - written before parsnips most eloquent reply, and before the suein56 edit, to both of which I defer.

[mint]

Last year, "Dragon Lady" at our tax office gave me a rate which I wasn't going to argue with as it was eminently favourable.

I put a note on the relevant page of my form that the rate was given to me by the X office on such and such a date and it was accepted and our avis was based on that.

[giantpanda]

Hi!

Legally it is the "cooperla" answer - the rate at the date you received the money.

But in practice it has been different;

- Some tax offices accepted the rate per 31.12.

- Sole tax offices issued their own average rate of exchange.

Now for the coming declaring, since the variations are much greater than in the past, if you absolutely not want to use, the day rate, then you can also call the Tax Office and ask, what rate they suggest. Some of course will say the day rate.

Yours,

giantpanda

[Vanman]

I'm sure that if you want the copper-bottomed answer, it is the exchange rate on the day the cash was credited to your UK bank account.

And if you'd like to do that, http://www.oanda.com/convert/fxhistory will give you a complete set of exchange rates for the full year.

But here's another question.

I'm probably not unusual in not yet having succeeded in getting the Inland Revenue to co-operate in paying my pension gross, so I've had tax deducted from it all year. I probably won't see the post-April 2008 tax back in my bank account until May or June 2009.

Do you think that for the un-repaid tax, the right exchange rate might actually be the rate on 31 December 2008?

It's clear that you have to declare the gross amount of any payment. So I would then use the actual daily exchange rate to convert each net pension payment I get (it's not that many, after all), and convert the total amount tax still owing to me at the year-end rate.

What do others think?

[cooperlola]

Vanman, whatever the source (ie whether it's a tax rebate, a pension payment, a present from your granny or whatever) the rate which applies is that of the day you received it in your account.   However, as gp points out, some offices will accept a general rate.  The important thing though, imo, is to be consistent and to be able to back up what you've done with some sort of evidence, should you be audited later on.

In your position, Vanman , you can either declare the net amount this year, and when you get the rebate, declare that as a lump (what my accountant did in the days when I had one) - or declare the gross amount now, as you propose.  Just keep all your evidence and make sure you can remember what you did and prove that you've paid up as you should.

[giantpanda]

Hi!

If you want to know the day to day exchange rate in 2008, you can find the information here:

http://fxtop.com/en/historates.php3?C1=GBP&C2=EUR&DD1=01&MM1=01&YYYY1=2008&B=1&P=&I=1&DD2=31&MM2=12&YYYY2=2008&btnOK=Go

Yours,

giantpanda

[chessfou]

I don't know if there is any difference between the rates shown but I suspect the impôts would prefer the figures be taken from the Banque de France:

http://www.banque-france.fr/fr/poli_mone/taux/change.htm

You can download a csv file with even more detail (e.g. end of month figures for the entire history of the rate back to Jan 1999).

[Vanman]

The Banque de France rates don't seem to be very close to the oand.com ones.

For example, over the last three days of the 2008 they are more than one cent apart, with the Banque de France making the euro value of sterling less than oand.com does on the 29th and 30th, and more on the 31st.

I wonder if they simply strike the values at different times of day, and with the exchange rates bobbing all over the place, that gives these differences?

But for what it is worth, the Banque de France says that on the 31st December, one euro was worth £0.9525 (ie €1.049 to the £), while oand.com says the figures were £0.9740 (€1.027 to the £).

[parsnips]

[quote user="Vanman"]The Banque de France rates don't seem to be very close to the oand.com ones.

For example, over the last three days of the 2008 they are more than one cent apart, with the Banque de France making the euro value of sterling less than oand.com does on the 29th and 30th, and more on the 31st.

I wonder if they simply strike the values at different times of day, and with the exchange rates bobbing all over the place, that gives these differences?

But for what it is worth, the Banque de France says that on the 31st December, one euro was worth £0.9525 (ie €1.049 to the £), while oand.com says the figures were £0.9740 (€1.027 to the £).

[/quote]

Hi,

   I wouldn't worry too much about these minor variations, the fisc, in practice, allows an error of up to 5% in declared sums .  

  

[bixy]

This discussion is strangely familiar. Last year we phoned the tax office who told us the rate to use.  It was the year end rate. I hope it will be this year too.

Patrick

[suein56]

[quote user="bixy"]Last year we phoned the tax office who told us the rate to use.  It was the year end rate.

[/quote]

S'not fair - I would love to use the year end rate this time, but our tax office decrees otherwise.

Sue[:(]

[woolybanana]

The rate is fixed by Paris according to my local tax office and is not variable.

[cooperlola]

Sue, this is precisely why, imo, it is vital that those in Bixy's position get this in writing, signed by somebody in authority.  The law is unequivocal, even though tax offices do allow latitude to make calculations easier.  Clearly for 2008, many of us will have banked some of our £s when they were worth closer to 1.4 Euros.  If we declare them at the year-end rate of close to parity, then we are a lot further than the 5% off the mark, quoted above as being allowable.   Unless you know that the person you've phoned will be the one who will do any audit of your tax return, then you do need to be careful, imo.  Even people in tax offices have been known to be wrong.  Be sure that they will put their signature to any advice they give before taking it as gospel.

And yes, Patrick, you are so right, it's deja vu all over again.[:D]

[parsnips]

Hi,

  I don't know why people are getting so paranoid about possibly being found out using the wrong rate. The " Charte de Contribuable", the tax man's rule book for dealing with "clients", says that if he suspects that there is a mis-declaration, he must write to you an "aimable" letter telling you that you may have made a mistake, and inviting you to correct it---provided you do this within the permitted time, there are no penalties and no "interets de retard". If you genuinely don't know where you have allegedly gone wrong you can ask the tax office for details.  

[HoneySuckleDreams]

hello

I have filled my Tax professionelle in using the rate on the day the money was paid. However I asked the tax people what they thought the rate should be (in case they were going to offer me a more preferable one). Unfortunately they quoted the following:

Bonjour Madame / Monsieur

Le taux de conversion est le suivant 1 euro = 0.73335 livre sterling.
Je vous prie de croire, Madame, Monsieur, à l’assurance de ma considération

distinguée.

quite how they came up with this I can only guess as the exchange rate was that rate or better (if you are a french tax man) in only 3 months of last year.

I'm sticking to my method.

[suein56]

[quote user="woolybanana"]The rate is fixed by Paris according to my local tax office and is not variable.[/quote]

OK, so ... the suspense is killing ... what did your tax office say the rate (fixed by Paris) was ...?

Sue - who has to add the rate for 1st Jan (or 31st Dec of previous year as 01/01 is a jour férié) to the rate for year end 31/12 and then divide by 2