The tax authorities have updated the Bulletin Officiel des Finances Publiques (BOFIP) with an administrative tolerance relating to the taxation of unclassified furnished tourist accommodations.
Renters of unclassified furnished tourist accommodations now have the option of retaining application of the micro-BIC scheme provided for in Article 50-0 of the General Tax Code (CGI) as it stood prior to the Finance Act for 2024 (Act 2023-1322 of 29-12-2023: JO 30 text no. 1) for their 2023 income to be declared in spring 2024.
Until now, taxpayers renting out furnished tourist accommodations that were not classified under Article L 324-1-1 of the French Tourism Code (e.g. Airbnb accommodations) were automatically subject to the micro-BIC scheme if their turnover for the previous two calendar years did not exceed €77,700. Under the micro-BIC scheme, a flat-rate allowance of 50% was deducted to determine taxable income.
The Finance Act for 2024 tightened the tax rules applicable to unclassified furnished tourist accommodation tenants, with two changes:
- the limit for application of the micro-BIC scheme has been lowered to €15,000 ;
- the flat-rate allowance has been reduced to 30%.
In the absence of details of when these changes will come into force, they will apply from income received in 2023, to be declared in spring 2024.
In order to neutralise the retroactive effects of these changes on income received in 2023, the tax authorities have published an administrative tolerance in the BOFIP (BOI-BIC-CHAMP-40-20 no. 55), allowing unclassified furnished tourist accommodation owners to continue to apply the micro-BIC scheme for their 2023 income before publication of the 2024 Finance Act:
- a limit of €77,700 for application of the micro-BIC scheme;
- a flat-rate allowance of 50%.
These changes are part of an overall trend towards tougher taxation for those renting out furnished tourist accommodations, which is still the subject of much debate. These changes require taxpayers not only to carry out an audit of their situation in the light of these changes, but also to redefine their asset strategy. Lobe Law, lawyers specialising in tax and sports law, is delighted to assist its clients in this respect. Please feel free to contact us!