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What's happened? The French Senate has approved measures to introduce a value added tax (VAT) on rentals through Airbnb and similar platforms, aiming to address a perceived imbalance in competition with the hotel sector.
Details. Under the current system, VAT is levied on furnished tourist accommodation based on specific services such as breakfast, regular cleaning and the provision of household linen. The proposed amendment argues that this is a “distortion of competition” between holiday rental companies and hotels, which are already subject to VAT.
Currently, Airbnb charges a tourist tax predetermined by the region (usually 10%), as well as additional taxes depending on the departments. For example, the Île-de-France region recently introduced an additional “Grand Paris” tax of 15%.
The background. Finance Minister Bruno Le Maire has proposed to increase taxes on Airbnb rentals to bring them in line with regular, non-tourist rentals earlier this June.
Currently, tourist rentals, including through Airbnb, enjoy a special tax discount in France. Le Maire stressed the need for fairness in taxation and expressed concerns about excessive benefits and favorable tax treatment.
What is going to happen? Despite Senate approval, the government retains the right to reject the measure. The Senate previously approved a measure to regulate furnished tourist housing by reducing tax deductions in areas with high rental demand.
Source: Skift
Photo by Rodrigo Kugnharski on Unsplash
