How to Pay Taxes on Tourist B&Bs in France?Micro-BIC Updated for 2023 Revenue to Choose Between Two Tax Regimes
If you are interested in engaging in tourist B&B rentals in France or are considering investing in a property to invest in tourist rentals, then you may need to be aware of the French government's tax policy.
If you are interested in engaging in tourist B&B rentals in France or are considering investing in a property to invest in tourist rentals, then you may need to be aware of the French government's tax policy. From 2024, there will be some changes to the Micro-BIC tax regime for small tourist B&Bs.
In this article, Micco will give you an overview of the Micro- BIC changes along with your options for paying taxes on your 2023 income.
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Table of Contents
- Introduction
- New Policy: Micro-BIC for Unrated Tourist Furnished Rentals
- Tax Policy Changes
- Factors Influencing
- Taxation and Costs of Tourist Furnished Rentals
- Summary
1. Introduction
Since January 1, 2024, the annual turnover threshold not to be exceeded for the application of the Micro-BIC regime for unrated tourist furnished rentals is set at €15,000. However, it is still possible to choose to apply the previous provisions for the income of the year 2023.
Meublés de tourisme are furnished villas, apartments or studios, for the exclusive use of the tenant, offered for rental to a visiting clientele who do not elect domicile there, and who stay for a period of one day, one week or one month (article L. 324-1-1 of the French Tourism Code).
They are distinguished from other types of accommodation, notably hotels and tourist residences, in that they are reserved for the exclusive use of the tenant, with no reception area or lobby, and no shared services or facilities. They differ from chambres d'hôtes, where the occupant is present during the rental period, and furnished tourist accommodation, where the occupant is not necessarily present during the rental period.
Seasonal or tourist rentals differ from residential leases in two respects:
the tenant does not take up residence in the property, but rather lives there mainly for vacation purposes;the seasonal rental must be concluded for a maximum of 90 consecutive days with the same person.
2. New Policy: Micro-BIC for Unrated Tourist Furnished Rentals
- Policy Content
- The 2024 Finance Law introduces an annual turnover threshold for direct or indirect rentals of unrated tourist furnished accommodations (such as villas, apartments, or furnished studios) to qualify for the Micro-BIC regime.
- Threshold
- The threshold is set at €15,000.
- As of January 1, 2024, the turnover thresholds (excluding tax) to benefit from the micro-enterprise regime are as follows:
- Sale of goods and provision of accommodation (such as hotels, guesthouses): €188,700;
- Direct or indirect rental of tourist furnished accommodations: €15,000;
- Service activities and liberal professions: €77,700.
- Reduction Rate Adjustment
- The reduction rate applied to income from the direct or indirect rental of unrated tourist furnished accommodations is now 30%. It was previously 50%.
- Applicable Year
- These provisions are considered applicable to income for the year 2023.
3. Tax Policy Changes
- Option to Continue Applying Previous Provisions
- In order to limit the consequences of retroactively applying these new provisions to transactions already completed, the Official Bulletin of Public Finance indicates that it is possible to apply the previous provisions to income for the year 2023.
- Options for Application
- For unrated tourist furnished rental activities, lessors have the option to choose the regime that will apply to their income for the year 2023:
4. Factors Influencing
- Impact of Threshold Changes on Business
- The establishment of a new threshold may impact unrated tourist furnished rental businesses, especially for small-scale operators.
- Adjustment of Reduction Rate
- Changes in the reduction rate may affect lessors' net income, necessitating a reassessment of business profits.
5. Taxation and Costs of Tourist Furnished Rentals
- Threshold Adjustment
- The establishment of a new threshold will affect lessors' tax obligations and business costs, necessitating adjustments to financial planning.
- Changes in Reduction Rate
- Changes in the reduction rate will directly affect lessors' pre-tax income, requiring attention to tax planning.
6. Summary
Since January 1, 2024, the annual turnover threshold not to be exceeded for the application of the Micro-BIC regime for unrated tourist furnished rentals is set at €15,000. However, it is still possible to choose to apply the previous provisions for the income of the year 2023. These changes may impact lessors' tax responsibilities, business profits, and financial planning, so close attention and appropriate measures are necessary.
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