Now that we know more about renting or subletting on Airbnb, but also how to declare income received on the platform, what taxation applies to the latter?
Airbnb has long slipped through the tax net in many countries. As a result, many users have become wealthy, taking advantage of a new revenue-generating windfall. Today, tax authorities in a plethora of countries (including France) have Airbnb rentals on their radar. It is therefore essential to declare income earned on Airbnb. But what kind of taxation applies to the private-to-private rental platform? Let’s find out without further ado what taxes apply to Airbnb.
Airbnb income: what tax rates?
The taxation of income generated on Airbnb is similar to that of the ISF. So, depending on your profits and your marginal tax bracket, you’ll be taxed at 0%, 14%, 30%, 41%. With an upper threshold not exceeding 45%.
Airbnb income: the tax system
Income from renting out your property on Airbnb falls into the category of industrial and commercial profits, or BIC. Depending on the size of the income generated, the declarant has two choices in terms of tax regimes: the micro regime or the real regime.
What’s more, when this income exceeds a certain threshold (to which we’ll return below), it is considered to be of a professional nature. The declarant is therefore required to pay social security contributions.
The micro scheme
This regime is of interest to tax filers whose annual income from their Airbnb activities does not exceed the Micro-BIC ceiling. In practical terms, this means €70,000. This is a simplified tax system, with a progressive tax scale after a 50% deduction.
In practice, let’s imagine that you have several homes that you make available to individuals via the Airbnb platform. If, over a 12-month period, your total rental income from the platform does not exceed 70,000 euros, you are subject to the micro-tax regime. To declare this income, you’ll need to use a 2042C tax form, line 5ND.
Actual regime
This second tax regime is of interest to VIP declarants, so to speak. In other words, renters whose annual income from Airbnb exceeds the Micro-BIC ceiling. That is, over 70,000 euros.
To simplify matters, if, as with the micro scheme, you have several units that you make available to transient hirers, and if the total sums generated over 12 months by all your units exceed 70,000 euros, you are subject to the real-estate scheme. To declare income under this tax regime, you must complete a 2031 SD declaration form.
It should be noted that this taxation system has no tax allowance. This means, more or less, that all amounts declared are taxable and deductible. This is in contrast to the micro system, which has a 50% allowance.
Social security contributions
In addition to the actual tax regime that applies to Airbnb income in excess of 70,000 euros, the declarant will automatically have to pay social security contributions linked to his rental activity. In fact, above €23,000 per year, profits are considered by the tax authorities to derive from a professional activity.
These social security contributions can be paid :
- On the autoentrepreneur.urssaf.fr website if you are an auto-entrepreneur,
- On the Urssaf website if you are covered by the general scheme,
- On the net-entreprises.fr website if you are self-employed.
VAT on Airbnb rentals
Whether your property falls under the micro regime or the real regime, VAT will have to be added to the rates for all the services offered as part of the rental. These include cleaning, breakfast, excursions and other services.
Don’t forget your business accounting
To facilitate the declaration of income from Airbnb, it is also important to keep scrupulous accounts justifying the origin of income and expenses deducted.
Not to mention that from January 1, 2019, Airbnb by law, will automatically have to send a statement of income received by each host to the Tax Authorities. A novelty introduced last June by the French National Assembly.