The Riff-Raff Element Posted September 6, 2006 Share Posted September 6, 2006 We met with our accountant earlier this week to discuss changingbuisness regime (we are currently running under a micro BIC regime, butcannot continue with this). However we change, in the future we will be"charging" TVA on our rentals and remitting it (less any deduction onTVA paid on expenditure) to the mighty organ that is the French state.I had assumed that we be billing this at 19.6%. However, our accountant(a shifty little blighter who wears a trilby and camel hair coat,summer and winter) thinks that the applicable rate for "hérbergement"may actually be 5.5% with other services (linen hire - not that we do-meals, cycle hire, etc) being liable at the higher rate.He admits that he is not certain as he has not been in this situationfor some time and will need to consult one of his august colleagues(another shifty little blighter with a pencil moustache and a side lineselling (wholesale and retail) items of ladies intimate apparel)and get back to us "in due course" ie sometime in the next month.I know that campsites charge TVA at 5.5% (and I have the bills to proveit), but has anyone heard of gites being subject to the same? Sounds abit good to be true to me, but if this is the case I could probablyafford to completely re-vamp the contents of my sock draw and buy two(maybe even three if Leclerc are doing a special) new pairs. Link to comment Share on other sites More sharing options...
Eslier Posted September 6, 2006 Share Posted September 6, 2006 I looked into this earlier in the year as we have come very close to the TVA threshold this year. I also had a similar non difinitive response from our accountant. In the end, rather than ask our accountants to investigate further, I decided that I didn't want to register for TVA (we are already on the régime réal anyway so that wouldn't have been a problem) this year and we have deliberately kept our income to just under the 70k€ threshold. We wouldn't have gone over by more than a couple of thousand anyway so it isn't a problem. Next year, we might not have a choice but it isn't necessary to register for TVA until the actual month that you go over the threshold so by then we should be well into the peak rental season.When you find out for certain (if there is such a thing as a definitive answer in France !) then I would be very interested to know what it is. Link to comment Share on other sites More sharing options...
The Riff-Raff Element Posted September 6, 2006 Author Share Posted September 6, 2006 I'll let you know when I find out. I have a feeling that this is not aparticularly common situation, hence the lack of clear information, butit must have occured in the past and there must be rules somewhere. Ithink that our bod is planning to write to the fiscs for aclarification. I've done a pile of searches on the old www, butpractiacally everything that comes up is about TVA on buildings to beused for accommodation - not entirely helpful!If the rate really is 5.5% it would certainly make choosing a regime more interesting... Link to comment Share on other sites More sharing options...
nimportequoi Posted September 7, 2006 Share Posted September 7, 2006 [quote user="Eslier"]I looked into this earlier in the year as we have come very close to the TVA threshold this year. I also had a similar non difinitive response from our accountant. In the end, rather than ask our accountants to investigate further, I decided that I didn't want to register for TVA (we are already on the régime réal anyway so that wouldn't have been a problem) this year and we have deliberately kept our income to just under the 70k€ threshold. We wouldn't have gone over by more than a couple of thousand anyway so it isn't a problem. Next year, we might not have a choice but it isn't necessary to register for TVA until the actual month that you go over the threshold so by then we should be well into the peak rental season.When you find out for certain (if there is such a thing as a definitive answer in France !) then I would be very interested to know what it is. [/quote]Well done both of you, it is proof that you can make a decent income from gites! Eslier, can I just say that if you need any help in deliberately keeping your income below the 70k€ threshold, I'm not far away and will happily take on any of your bookings that take you over the limit [;-)] Link to comment Share on other sites More sharing options...
Cassis Posted September 7, 2006 Share Posted September 7, 2006 If I can confuse matters further, according to the Gites de France guide to setting up gites and chambres d'hôtes, then TVA is not applicable on rental of furnished properties. It's on page 29-30 of the guide (page 31 of the .pdf file).guideducreateur Link to comment Share on other sites More sharing options...
The Riff-Raff Element Posted September 7, 2006 Author Share Posted September 7, 2006 [quote user="SusanAH"]Well done both of you, it is proof that you can make a decent incomefrom gites! Eslier, can I just say that if you need any help indeliberately keeping your income below the 70k€ threshold, I'm not faraway and will happily take on any of your bookings that takeyou over the limit [;-)][/quote]Oh the revenue side has been just peachy. It's the bit that's left whenwe've taken of the operating expenses, social contributions, capitalitems, reserve funds, etc that I could do with improving! Ends meet at19.6% TVA (boy am I pleased I wrote a business plan all those yearsago), but at 5.5%....socks could be but the first in a long line ofimprovements in personal grooming.Still nothing back from our spiv-like book-cooker. I can almost hear the head scratching from here. Link to comment Share on other sites More sharing options...
Jo Taylor Posted September 11, 2006 Share Posted September 11, 2006 Unfurnished rentals are generally exempt from VAT (TVA – taxe sur la valeur ajoutée), as are most furnished rentals, as long as your business is under the MicroBIC tax regime.If you’re running a B&B business with income exceeding €76,300 and are consequently not under the MicroBIC system, your income may be subject to VAT. This applies if you offer "hotel" services, namely three or more of the following: bed linen, reception, daily cleaning and breakfasts. This means that a B&B business (generating over €76,300) is almost certainly subject to VAT, whereas most gite businesses are exempt.If your business is subject to VAT, the accommodation itself is taxed at 5.5 per cent and other services (e.g. meals) at 19.6 per cent. You will need to take advice from your accountant as to whether you must charge VAT. Link to comment Share on other sites More sharing options...
Cassis Posted September 11, 2006 Share Posted September 11, 2006 I wonder how many B&Bs generate over €76,300? [blink] Link to comment Share on other sites More sharing options...
The Riff-Raff Element Posted September 12, 2006 Author Share Posted September 12, 2006 [quote user="Jo Taylor"]Unfurnished rentals are generally exempt from VAT (TVA – taxe sur la valeur ajoutée), as are most furnished rentals, as long as your business is under the MicroBIC tax regime.If you’re running a B&B business with income exceeding €76,300 and are consequently not under the MicroBICsystem, your income may be subject to VAT. This applies if you offer"hotel" services, namely three or more of the following: bed linen,reception, daily cleaning and breakfasts. This means that a B&B business (generating over €76,300) isalmost certainly subject to VAT, whereas most gite businesses areexempt.If your business is subject to VAT, the accommodation itself istaxed at 5.5 per cent and other services (e.g. meals) at 19.6 percent. You will need to take advice from your accountant as to whetheryou must charge VAT.[/quote]Thanks Jo - You've matched up exactly with what our accountant thoughtwas the case. He is, as I mentioned, getting clarification andsomething in writing (so valuable!) from the powers that be. This couldreally change the complexion of TVA registration for quite a lot ofgite owners, particularly for those getting a lot of building workdone... Link to comment Share on other sites More sharing options...
Miki Posted September 12, 2006 Share Posted September 12, 2006 [quote user="Cassis"]I wonder how many B&Bs generate over €76,300? [blink] [/quote]Chance would be a fine thing ! We haven't got a plastic bin big enough anyway [:)] Link to comment Share on other sites More sharing options...
Cassis Posted September 12, 2006 Share Posted September 12, 2006 And Miki's mattress is already overstuffed, I imagine. [:)][quote user="Jon D"]Thanks Jo - You've matched up exactly with what our accountant thoughtwas the case. He is, as I mentioned, getting clarification andsomething in writing (so valuable!) from the powers that be. This couldreally change the complexion of TVA registration for quite a lot ofgite owners, particularly for those getting a lot of building workdone...[/quote]It also matches up with the Gites de France guidelines. Link to comment Share on other sites More sharing options...
Miki Posted September 12, 2006 Share Posted September 12, 2006 Ah but those lovely old Francs were so much more comfy, these new fangled Euros don't half stick in the tender bits [:)] Link to comment Share on other sites More sharing options...
Jo Taylor Posted September 12, 2006 Share Posted September 12, 2006 [quote user="Miki"]Ah but those lovely old Francs were so much more comfy, these new fangled Euros don't half stick in the tender bits [:)][/quote][:'(][:$] Link to comment Share on other sites More sharing options...
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