Airbnb and Housetrip: What income should you declare in France?

By Valérie Aston on 17 December 2015 · Viewed 14673 times · Questions

Many people with a property in France are renting out their apartment or house for a few days or weeks on sites such as Airbnb and Housetrip in order to generate extra income. However this raises taxation questions, e.g. is rent received taxable and if so, how is it declared to the tax authorities?

Rent received from Airbnb is subject to income tax, in a similar way to furnished rental. The person renting the property out on Airbnb is considered by the tax authorities as an unprofessional landlord (Loueur Meublé Non Professionnel LMNP). This income should be declared as Bénéfices Industriels et Commerciaux (BIC) on the French income tax form (2042C).

The advantage of the micro BIC regime

The owner of the property can use the micro BIC regime, if the annual income from the activity does not exceed 32,900 euros. The micro BIC regime grants an allowance of 50% for expenses, hence considering that the income represents 50% of the turnover, i.e. yearly rental income. You would therefore only need to declare the yearly rent on your French income tax form (tax return form 2042 C, revenu non professionnel BIC ), and the tax office will automatically apply the 50% rebate.

This is slightly different from a gite or location meublé de tourisme, where the annual revenue cap is set at 82,200 euros and the standard expenses allowance is set at 71%.

Is Airbnb income exempt from tax in France?

As indicated in the code général des impôts, hosts can be exempt from tax on rent received via one or more rental platforms, providing it does not exceed 760 euros per year. Anyone with a yearly rental above 760 should therefore be declaring the rental income to Impots.

Changes in 2016 for Airbnb rental income in France

Senators and deputies wanted to submit income generated from collaborative platforms such as Airbnb, Housetrip and Blablacar to an automatic taxation system, as many owners forget or choose not to declare this income.

Amendement voted by Parlement: Plateforms to issue yearly statements

On Friday 11 December 2015, the National Assembly passed an amendment requiring collaborative platforms, like Airbnb or HouseTrip, to send an annual statement of income to their users. The amendment requires collaborative sites to offer their users reliable, clear and complete information on their obligations, especially in terms of taxation. A penalty fine of 10,000 euros will be charged to collaborative sites not publishing this information. It also forces collaborative sites to systematically issue their users with an annual summary of the revenue generated on the platform, called relevé annuel de revenus.

This measure will apply from 1 July 2016. The amendment voted specified it will help to clarify the border between activities similar to those of a self-employed and those under the sharing economy, which does not generate income. Revenue derived from sharing platforms (such as Blablacar), which are not intended to make money but to share costs, are indeed not taxable, and are therefore not affected by this measure.

Suggestion from senators: taxation from 5,000 euros in 2016?

Seven senators in charge of writing a report on this subject have suggested that the collaborative platforms should report individuals’ income to the tax authorities, in order for Impots to send a pre-filled income tax form. This is for instance how employee’s income is currently prefilled (employer declare to Impots, who issues pre filled income tax forms).

This first option was issued in September 2015 by senators in charge of groupe de travail on L’économie collaborative: propositions pour une fiscalité simple et efficace. The aim of these senators is not to impact too much on the collaborative economy. They have therefore suggested an income threshold above which rental would be liable to income tax. The motivation with this threshold is to differentiate people trying to reduce their costs (for instance with car sharing platforms) or making occasional income, from people making a professional income due to the repetition of the rental.

The senators have set this limit to 5,000 euros in additional annual revenues for all collaborative platforms (économie de partage). Below this amount, users would in principle be exempt of taxes. The average income perceived per person from the Airbnb website is believed to be about 3,600 euros per year, which is well below the proposed threshold mentioned in the report.

Beyond 5,000 euros per year, however, the gains would be subject to income tax and social contributions. Based on the senators’ calculation, an annual income of 8,000 euros would be taxed 738 euros, while a yearly income of 20,000 euros would be taxed 3,690 euros.

For the government, this system would prevent unfair competition vis-à-vis traditional companies (hotels, gites), but also and especially fill a shortfall in tax revenues. Indeed, few individuals do declare their income generated from the collaborative economy. According to a poll by TNS Sofres-BVA, it is believed that only 15% of users planned to report last year’s income from collaborative platforms.

Read the report (PDF) issued by the senateurs (in French).

Le Figaro article on this subject.

Valerie Lemiere: Start Business in France

About the author: Valérie Aston

I've been helping people who want to start or already have a small business set up in France since 2009. After graduating from a Master of Business Administration (MBA) degree, I worked as a senior marketing consultant in the UK and France for various International companies. I worked as a conseillère en création d'entreprises (senior business advisor) for BGE here in France and run this independent business on a daily basis.