xeresod said:
There is a double taxation agreement between the 2 countries, so when you make your return here you will be given credit for the tax paid in France.
I do not think that's correct. French rental income for non-French resident is taxed in France and there is no relation whatsoever with Irish taxes, i.e. you do not get tax credit in Ireland for tax paid in France.
asdfg said:
I take it that you understand that you also have a liability to Irish Revenue. Even if it is Nil you have to declare it
Where did you get this information from ? do you have a document or link to back this up...
I have checked and double checked with French revenue, and i have it in writting that there is no liability to anybody else than the french revenue for French rental income. This is particular to RENTAL INCOME
Note: there is liability to Irish revenue for any other French income, i.e. stock trading, salary....
Tax on a french rental income is easy enough to calculate for non-resident.
First the taxable rental income needs to be define
2 options:
Option A (called Microfoncier):
only valid if total rental income is less than €15000
Deduct 30% (rate for 2006) from all rental incomes --> taxable rental income
For instance: rent is €500 pm, €6000 per year
30% of €6000 is €1800
€6000 - €1800 = €4200 <=== taxable income
Option B: valid regardless of total amount of rental income
There is not flat deduction as above. The landord can deduct all "cost" (insurance, tax "fonciere", renovation work, mortgage interest , management fee, etc...) from the total income
Landord decides with option A (if applicable) or B suits him best
Then, the due tax needs to be calculated
Again, there are 2 options non-resident.
In any case, the max tax rate is 25%
Option 1: (easy option)
The landlord decides to pay 25% tax on taxable rental income defined using Option A or B above. That's it.
Option 2:
Landlord gives proof of total irish incomes.
To these incomes, the taxable french incomes (calculated with option A or B above) are added.
Then based on marital status/ kids - no kids, the french tax man will calculate what your tax rate would be SHOULD YOU HAVE BEEN LIVING IN FRANCE. If the rate is higher than 25%, 25% is applied.
This is one of the advance of being non-resident. The other advantage is that non-resident to not pay neither CSG nor RDS tax, which saved them about 11%
This tax rate is then applied to taxable rental income to determine how much tax is owed.
Option A and Option 1 make the tax return very straigh forward, and no help is needed from neither accountant nor french tax office.