French Income Tax

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ronsat
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Joined: Wed Dec 14, 2011 1:03 am
Location: Neffiès, Languedoc, France
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French Income Tax

Post by ronsat »

When we bought our place in Herault 8 years ago, we were told that the best thing to do with income tax was to declare yourself a "mini-BIC" - since simply paying a percentage of gross revenue was a lot cheaper than having an accountant figuring out your net profit.

So, we have done that over the years, usually paying 5 or 6% or our revenue. However, this year, when I filled out the form, and including our revenue in the space "5ND BIC non prof. régime micro - Locations meublées" - it then calculated the tax at close to 20% of our revenue. Is this right?

Our place is not "classé" - as it is old, and doing things like adding fans to interior washrooms through stone walls was something that was a little imposing.

Any thoughts on how to reduce the tax bill?
We are Canadians who love spending time in Languedoc.
http://www.languedocvacationhome.ca
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Richard D
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Joined: Sat Mar 03, 2007 5:19 pm
Location: Charente-Maritime, France
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Post by Richard D »

Yes as foreign residents registered for micro BIC (since 1998) we used to pay flat rate 20% tax on 29% of Gross income, so basically about 6%. Very generous we thought !

A few years ago they changed the law so that foreign residents have to pay CSG+CRDS which pretty much doubles the tax bill. There's no avoiding it I'm afraid.

Around the same time they changed the law so that only officially classified gites would be allowed to claim the 79% deduction via putting your gross revenue into box 5NG rather than 5ND (which I think only gets you a 50% allowance).

This involves getting your place inspected by the local tourist board or a registered agency like Gites de France. Once you've been inspected and fixed anything they don't like then will receive a notice of classification. You have to pay for the inspection and it has to be one every 5 years.

Sounds to me like your best option would be to bite the bullet and get inspected so you can use the other box. If you found one lot of inspectors were too fussy then you could use someone else. We got gites de France in and they were pretty reasonable if not a little pricey.
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