Tax declaration - exchange rate to use for UK sourced money...

[Crevette]

As I am paid in the UK and pay taxes in France, I was wondering what exchange rate to use for the tax declaration.

I found some information on exchange rates by month on the following link ;

http://www.uktradeinfo.com/index.cfm?task=exchange&lastcountry=France

Therefore I was thinking of applying the exchange rates for each month to my salary payment for each month ;

01-Jan-05 1.429
01-Feb-05 1.4398
01-Mar-05 1.447
01-Apr-05 1.4401
01-May-05 1.467
01-Jun-05 1.4515
01-Jul-05 1.5022
01-Aug-05 1.4396
01-Sep-05 1.4709
01-Oct-05 1.4825
01-Nov-05 1.4698
01-Dec-05 1.4706

For my Health Care cover (still don't know if it is taxable or not following previous mail...) I was thinking of applying an average rate ;AVERAGE 2005 1.4592

Does this all seem reasonable (or more importantly, will it be OK with the tax inspectors?!)

Regards,

-Rob-

 

[Will]

There seems to be no set convention. When I was doing my own returns, as an individual and then a micro-bnc, I used the rate that applied at the time the forms were filled in. The accountants we now use have a table of different rates that apply at different times and use those. Either way is acceptable to our tax office - but that's not to say others might not apply their own rules. I think the official guideline is to apply the rate at the date of the transaction, but as with everything in France it is not rigidly applied. The end result is likely to make a negligible difference to the amount of tax actually due, unless your annual salary is astronomical. There is also the question of whether you use the commercial rates, the tourist rates, or something in between in calculating the figures.

[The Riff-Raff Element]

[quote user="Will the Conqueror"]There seems to be no set convention.

When I was doing my own returns, as an individual and then

a micro-bnc, I used the rate that applied at the time the forms

were filled in. The accountants we now use have a table of different

rates that apply at different times and use those. Either way is

acceptable to our tax office - but that's not to say others might not

apply their own rules. I think the official guideline is to apply the

rate at the date of the transaction, but as with everything in France

it is not rigidly applied. The end result is likely to make a

negligible difference to the amount of tax actually due, unless your

annual salary is astronomical. There is also the question of whether

you use the commercial rates, the tourist rates, or something in

between in calculating the figures.[/quote]

Our accountant uses a table of monthly average rates that apply to

sterling payments received in those months, irrespective of the rate

actually achieved when the money was transfered to France (we use a UK

account to gather payments from our guests who wish to pay in sterling

and transfer as an when there seems to be a reasonable chunk). These

rates are supplied by some official body, but, nonetheless, tax offices

in different areas seem to require different approaches. Go and have a

quick word with your local impôts - you may well find that your

approach is more than acceptable, but if not they should be able to

supply you with whatever they consider to be "official".

[Mikew]

Last year the Impots told us the figure we were to use....

[Ron Avery]

Last year I used an average of 1.42€ to the £ rather than mess about with daily variations and fluctuating rates, although I did hear that some tax offices in the brit dominated regions had laid down a higher exchange rate and wanted to see evidence of £'s received.

That to me is unfair as it should be the rate you actually got rather than what was available.  In some cases as Will has said, it depends if you get your money at tourist rate or bank rate.  The figure proposed by Crevette for 2005 is about what I had calculated and I will be using that figure unless told differently by the Impots Office.[:D]