Boat rentals between individuals: what tax?

The practice of pleasure boating involves significant costs for boat owners. This is why more and more boaters decide to hire their boat a few days a few weeks a year. However, considered as commercial income, rental income is subject to tax and must therefore be declared in France.

How does the taxation of rent between private individuals work? How to make a statement and from what amounts? Top Charter answers your questions.

Rental income returns: two possibilities for owner's boaters

The rental of a pleasure boat represents a commercial activity on the fiscal level. The income from this activity is taxable in France according to the legislation. Your rental income is therefore to be reported in the "Industrial and commercial profits" section.

First of all, here are some things to know:

Tenant who has acquired a boat by Leasing with Option to Purchase or real estate leasing is considered as an owner (except for special exceptions). He must submit to the same taxation.
In relation to wealth tax, if the boat is acquired by leasing option it's not taxable to the wealth tax because the taxpayer does not own the boat. However, the value of the right of option is taxable.
If the boat belongs to a natural person, the taxation of rental income is incorporated into the income tax at the progressive rate. (Marginal Slice of Taxation - 45%).

There are two separate tax systems for the declaration of rental income from boat rented at the wharf or in navigation:

The micro-enterprise tax regime and the simplified real tax system

How to choose between the two tax regimes? To decide between these two types of tax regimes, you must take into account the income and expenses of your ship but also your overall tax situation. This will give you the scheme corresponding to your activity. To see more clearly, focus on these two tax systems and their characteristics.

Micro enterprise tax regime

The micro-enterprise scheme is aimed at owners whose annual rental income does not exceed € 72,600.

	Characteristics of the micro enterprise tax regime
Non imposition of VAT	With this special scheme, you are not subject to VAT
Lump-sum allowance of 50% of revenue collected	This is the taking into account of your expenses. Warning: it's the administration that will deduct the lump-sum allowance. You must indicate the total remuneration received on your return.*
No special tax returns required	In this plan, you must complete a journal book detailing your income chronologically with invoices, vouchers ... You must also have a record with the detail of your purchases per year.

* Taxable values (turnover, capital gains, etc.) must be declared on your tax return in addition to the total income of your household tax.

It should also keep in mind that:

In the case of a boat financing, it is impossible to recover the VAT on the fee of a Leasing with Option to Purchase or on the purchase of a boat.
No deficit can be identified as a result of the determination of taxable income.
The above plan is reserved for renting by a natural person.

Simplified Real System

The simplified real regime is compulsory for annual revenues of more than € 72 600 and less than € 238 000. You can also choose this plan without obligation if your income doesn't exceed € 72,600.

	Characteristic of the simplified real system
Subjugation to VAT	With the simplified real system, you have to pay the VAT (Value Added Tax)
Taxable profit	The taxable profit of your activity is determined on the basis of actual expenses recognized and deductible. The calculation is made on a pro-rata basis.
Subjugation to Territorial Economic Contribution	You are subject to the Territorial Economic Contribution because, as an owner, you are putting in material and intellectual means to organize the rental of your boat.
Tax declaration	You must produce a tax return. It's a set of tax returns specially edited for independent traders in the normal real tax system.

Keep in mind that:

The actual simplified real system applies as of right if your boat belongs to a company.
The rental income is then taxable to the wealth tax.
A possible deficit may be carried forward.

Finance law and the Terrasse report

In France, since July 1, 2016, rental platforms between individuals must inform users of their tax obligations.

Rental platforms from individual to individual must also report revenues from the previous fiscal year to the beginning of each year.