The Finance Act for 2024 has tightened the tax rules applicable to tenants of unclassified furnished tourist accommodations with effect from 2023 income, with two adjustments:
- the limit for application of the micro-BIC scheme has been lowered from €77,700 to €15,000;
- the flat-rate allowance has been reduced from 50% to 30%.
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%.
The Conseil d'Etat cancelled this tolerance measure, ruling that the administration had not been competent to add to the law. In practice, however, this annulment does not prevent taxpayers who applied this solution for 2023 income tax purposes from relying on it on the basis of the guarantee against changes in the formal interpretation of tax texts by the administration enshrined in Article L 80 A of the French General Tax Code (FGTC).
The taxation of unclassified furnished tourist accommodation is the subject of much debate. These developments mean that taxpayers not only need to carry out an audit of their situation, but also to redefine their asset strategy. Lobe Law, lawyers specialising in tax and sports law based in Paris 7, is delighted to assist its clients in this respect. Please feel free to contact us!