Can this Tax bill be right?

[Paul Carmel]

Hi all,

Back home with a bump!

For the last 5 years we have had an income of around the €30,000 mark from our holiday rental. We are on the micro bic system and so far each year when we've received the Avis d'impot sur les revenus, we have not had to pay anything (usually we have only had to pay around €100 taxe professionale). So imagine our surprise when today we received the 2005 avis, including a bill for €2,200 we did do a bit better last year ie €38,000, but this still doesn't seem right. Naturally we are in a bit of a panic as it's a lot of money and due in Sept - does anyone have any ideas? Is it likely that in fact we should have been paying something over the last few years but have somehow got away with it til now? Or is it probably a mistake?

Any advice very gratefully received!

[Hells Bells]

Paul,. welcome back. As a newbie to this, I couldn't say, but i am interested in what the others have to say about it.

Helen

[la vache!]

Welcome back Paul! I'm not an expert by any means, I just pay French taxes but it does seem a lot considering that after the abattement you are only liable to be taxed on around 9500€. Is there anything they forgot from 2004/3 that they've added on? They usually send this out seperately, though. I would query it with the hotel d'impôts as they do make mistakes. It is difficult to compare cases as I am a single with one child, so therefore get extra tax allowances, but I got my impôts bill through today and have to pay 579€ on a net of around 17000€ if this is any help to you.

[Paul Carmel]

Hi,

We have been looking at the form and think we may have found the problem - hopefully someone out there can confirm?

In section 5 B, Revenus Industriels & Commerciaux Professionnels, in the first box Régime micro entreprise, we weren't sure which box to put our total in as the form has changed from last year. So we asked someone at the tax office and they said it should be box KP, Prestations de service. Now looking at the régime micro form shouldn't renting out a property be Categorie 1 (ventes ou fourniture de logement) rather than Categorie 2 (prestations de services)? This would make sense as then the limits are lower in 2. Also the abattement they have given us is really only about 37%.

If anyone can tell us which categorie it should be that would be great. And does anyone have any experience of going to the tax office and asking them to recalculate?

Finally yes, we are back! But still on the boat til October so not in full effect on LMH as can only do so via a dodgy and infrequent wifi connection!

[la vache!]

Paul,
you filled in the professionel section, you should have filled in the next section, C1, Revenus industriels et commerciaux non professionels, box NO (Vente de marchandises ou locations meublées non professionelles). Never trust a fonctionnaire!
Try and get it sorted asap - otherwise you will have to pay the tax they stated by the due and then wait for a refund.
Good luck!

[Paul Carmel]

Hi Susan,

Thanks for that! OK, so it's definitely 'vente' and not 'prestations', but what's the difference between professionnel and non-professionnel? ie how do I know which I am? How do I explain to the tax office that I'm a non-prof and not a prof? (bearing in mind it is our sole source of income and we are registered for taxe professionnel)

Thanks again,

[la vache!]

Paul,
if you are not registered at the Chambre de Commerce, then you are classed as non professionel. 'Prestations' include the provision of services, such as meals, bed linen (although most gites offer bed linen included, they are officially a prestation). etc.
As the gites are your sole source of income,and your earnings exceed 23,000€, you should offically register with the Ch de Commerce and be professionel which means you are then liable to pay all the cotisations that go with it, which are huge, particularly the AVA pension. On the other hand, as a micro entreprise, you have the right to earn 76,300€ without going necessarily going professionel. It seems to vary from department to department as to how strictly these rules are enforced, but I'd stay as non prof until someone asks you to do differently. I think you would have to be earning near the 76,300€ level in order to be investigated and possibly asked to change. If you are non professionel, the tax office get some tax, whereas if you register, you pay so much in social cotisations that there is rarely any profit left to pay tax on. So the tax office don't seem to worry about whether you are registered or not.
Regardless of whether or not you are professionel or non pro, you pay taxe professionel as a micro entreprise (instead of taxe d'habitation)
I hope the above isn't to confusing - it is really a grey area and as I say, a lot depends on where you live as to how the rules are enforced!

[Paul Carmel]

Thanks again Susan! Yes it is very confusing but it does seem a bit clearer now.

We'll be going into the tax office on Monday, so if in the meantime anyone else has any other advice etc then please post it!

[la vache!]

When you go to the tax office and explain the error of the wrong box being filled in, just check with them as to whether you will still have to pay the amount they have asked for by the due date. If you do, and you don't (if you see what I mean) it is an offence. If they are able to rectify the problem sooner than the due date, all well and good, but when I've explained an error to the tax office, it has usually taken months to get the correct bill or refund, so be warned, you may still have to pay the tax bill up front and then wait for a refund to come through later on.

[Paul Carmel]

Thanks once again Susan.............just when you think you have things sorted French red tape comes and reminds you of where you live

[gh]

Hope this is helpful, copied from another forum where someone was asking the similar question.

"If you think there is an error in your tax assessment ( this refers to all ) and you wish to ask for details or have a correction made, you have to know that you cannot consider this as a valid ground for delaying the payment! ( this would imply taking the law in your hands).
This is a fundamental principle regarding tax payments! A taxpayer has the right to contest a tax assessment, but must pay in advance The only recognized exception is the payment- deferring (French: sursis de paiement ) according to the Article L 277 and R 277-1 of the Procedure Code which applies to all the direct taxes (Income Tax, Taxes d' Habitation and Foncière) and the VAT .

See:
http://www.leparticulier.fr/lire_articl ... semaine=47

For firms see:
http://www.abcdent.fr/jurifiscal/articles/84

You will see that in most cases it is hardly " worthwhile" starting this procedure, unless very high sums are concerned, since they have instated in 2002 a limit of Euro 3000 because they impose on you to pay the sum as a " guarantee ". ( so practically it is simpler to pay, and get a refund).

This means that you have to act promptly if you hope that the written correction reaches you in good time, before the payment deadline– best is to put your case in writing, and send it with the required proof per registered mail with answer. Certainly you can go to the Tax Office at the specified public opening hours ( phone - number is on top of form ) .

There is also a legal limit ( which does not necessarily mean you cannot appeal later ) which ends at the end of the second year of the date limit when the tax is due.

NB. On the other hand the Tax Office have a delay of 4 years to collect a tax, ending end of 4th year, after which the regular date limit for the tax payment! After this the claim is prescribed, but any action taken by the Tax Office before that limit will interrupt the prescription.

Should you however not be in a position to foot the tax bill, you should act within the given delay, and not let the matter unsettled. You have to propose to the Tax Office a payment plan! Should you however be in such a position that you know you cannot make any sort of plan, you can always " try "to make a request to the Tax Office that they cancel your debt! ( They have no obligation to do this ) This should be made in writing giving all the necessary details with documents.. Should your request be turned down, you can appeal to the " Directeur des Services Fiscaux ". "
Can't say if it is accurate or not. Perhaps the contents of the post will help you overcome your current problem, or give you a starter where to go, obviously together with Susan's informative post.

[paolo]

Welcome back Paul!

I went to the Centre des Impots yesterday and found them surprisingly human and helpful. Seeing that I was a bit bemused, they told me to just come back at tax time and they would help me fill in the forms.

They also told me that under a Micro BIC regime you get a 72% abattement (70% next year), which I took to mean that you pay 28% of your gross income, without deducting expenses. From the above, that sounds wrong - is it? I hope so.

[Sarah]

Paulo

I was under the impression that the 72% abattement means that you only pay tax on 28% of your income. It was explained to me by our tax office that the abattement is by way of a deduction for expenses and is currently very favourable (there's no way our expenses are as high as that).

Sarah.

[Alan Knighting]

Paolo,

Under Micro BIC you only pay tax on 28% of your rental income.

Alan

[paolo]

Under Micro BIC you only pay tax on 28% of your rental income.

That's what I meant - gross rental income, not total income. But are you saying that you pay 28% in tax, or that you pay the applicable tax rate on 28% of the income? If the latter, how much is that?