Income Tax

Dear Sir,<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

I inform you that if you have a nine year contract (as is normally the common practice in case of a commercial lease) you have to declare your business for the tax regime BIC Réel simplifié. The reason for is that you have signed a leaseback contract.

In <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />France, this type of contract is liable to the VAT and, when you are liable to the VAT, you cannot opt for the micro-BIC.

However, this tax regime (BIC Réel simplifié) is the most appropriate for your business. It means you won’t have to pay any taxes on your income (because every cost is deductible) during a minimum of 25 years.

On the other hand that also means you will have to register (P0 form) your activity to the Tax office nearest to your flat and to submit two declarations per year (CA12 and 2031).

For further information, do not hesitate to contact me by email

(kerdelo.guillaume@caramail.com)

Hello, I have some questions about tax.

I am Irish and pay my taxes in <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Ireland.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

There is a tax treaty between Ireland and France dating back to 1968 covering Income Tax, which was modified by the Finance Act 2007 to include Capital Gains Tax.

Here are my questions:

1) Buy to Let

Let us assume: My rental income on my BuyToLet is 12000€ a year. My expenses (interest on loan, etc) are 5000 € a year => my profit will be 7000 € a year.

What now? Do i refer to the tax band table used in France (0 to 5614€ = 0%, €5615 to €11198 = 5.5%, etc.), which means I pay 7000€ - 5615€ = 1385€@5.5% = 76€.

OR

Do I simply pay 25% of 7000€ = 1750 €.

I understand that I will get a tax credit for any tax in France (leaseback and B2L treated the same way by Irish tax people), which I will enter in the famous Panel F on my Irish tax returns.

2) Leaseback

Let us assume: My rental income on my leaseback is 12000€ a year. I pay (interest on loan + taxe foncière) of 5000€ per year.

What now?

Do I go for the régime Micro-BIC simplifié? That is; subtract 71% of profits and pay 29% tax on the 12000€r (that is, not deduct anything, neither the loan interest, nor amortization, etc.)

OR

Do I go for the régime Micro-BIC simplifié, subtracting (interest + taxe foncière):

12000€ - 5000€= 7000€ and then pay 29% tax only on the 7000€

OR

Do I go for the régime réel, thus subtracting interest and amortizing? Which means I don’t pay any tax at all?

I understand that I will get a tax credit for any tax in France (leaseback and B2L treated the same way by Irish tax people), which I will enter in the famous Panel F on my Irish tax returns.

Thank you

Sam