Declaring a small income in France Photo by Ermetico via Fotolia

Let’s talk about taxes … again!

The new trend of renting a room or apartment via Airbnb, or selling a few of your knickknacks on the Le Bon Coin or Ebay has become more and more popular, and has caused quite some confusion to many people about how – or even if – they should declare their earnings. It’s been a bit of a no man’s land but all of this is about to change.
The grey area has now been blown away with the new guidelines brought in with the 2016 Finance Law which has now made it clear that any websites providing trade between individuals (ie: car sharing, car rental, room rental, etc) must provide their users a summary of all their transactions on January of each year.

Note:  these websites are not obliged to inform the tax authorities, I guess they are hoping that you will.
So when do you declare these earnings, just how are you taxed? See below some questions that I am asked on a regular basis, I hope this will help you make the right decision.

I rent my room via Airbnb, do I need to declare this?

Well, yes. If you rent your main residence, secondary residence, or even your furnished bedroom on a ‘regular’ basis, the rental income would be taxed under ‘Micro BIC’. This means that if your rental income does not go over the €32,900 earnings ceiling you would be taxed on only 50% of this income. They effectively give you a 50% reduction because you cannot reduce any costs from your rental income such as insurance, maintenance costs, etc.
Note: It’s not the length of the rental that would determine whether this is a regular activity but if it is something that happens each month or each year, even if it’s only a few days but each year, this would be classed as a regular activity.

I rent out my furnished house occasionally, do I need to declare this?

As this is a furnished house and happens very rarely or it’s a one off, the revenue would be declared on your tax declaration under ‘revenue fonciers’. If the earnings are less than €15,000 per year, this automatically comes under the category of ‘micro-foncier’ and you would get a 30% reduction on the rental income.

I sublet a room in my house, do I need to pay tax on the rental income?

If you live in the house and sublet a furnished bedroom (maybe to a student), the rental income is not taxed so long it’s limited. The 2016 revenue limits for each region have not yet been published. However to give you an idea of how much rental income is non-taxable, see table below:<br>

 

2015 allowance: €184  per m2 per year for the Paris area
Example: if you rent a 15m2 bedroom for 12 months in Paris.
184 x 12 = €2,208 maximum monthly amount (without charges)
If you rented this room out for only 8 months of the year you could charge €276 (without charges)

If you rent a room for the day, week or month or even a few rooms in your house to visitors, again, this is not taxable so long as the amount does not go over €760  per year (including breakfast).
As soon as you go over the limits above, the residual rents would be taxed as ‘Micro BIC’ as explained above.

I’m an avid user of Le Bon Coin do I need to pay taxes on my earnings?

Again, this really depends on your usage of these types of websites (Ebay, Le Bon Coin…). We come back to the notion of regularity. If you are selling your old nick knacks or your car, then no because this is not a regular activity. However if you are buying items and then re-selling them, yes! The easiest way to do this would be to create an auto-entrepreneur (now called micro-entrepeneur) status with the Chambre de Commerce whereby you would benefit from a reduction of 74% of your sales. You could not however reduce your business running costs from the business and you need to pay 13,4% in social contributions based on your activity. More information on the autroentrepeneur site.

I practice car sharing, what are the tax implications?

If you are car sharing or coivoiturage, maybe using BlaBlaCar, etc, there are no tax implications so long as you respect the rules of asking passengers only to share with the running costs ie petrol, insurance, toll costs etc.

 


Tracy Leonetti, LBS in FranceFrenchEntrée contributor Tracy Leonetti is a French red-tape expert with over 20 years of experience helping people deal with french administrative problems. Both for people moving to France or already living in France, Tracy provides invaluable help with child benefit payments, small business set up, car registrations, utilities set up, and healthcare registration, to name just a few.