Newsletter November 2023

Employer reimbursement of transportation costs

The amended finance law of August 16, 2022 has increased the exemption threshold for social security contributions to 75% for the years 2022 and 2023 (compared with 50% normally). Legally, the employer’s obligation to cover the cost of public transport remains limited to 50% of expenses, but companies wishing to go beyond this limit will be able to take advantage of the higher exemption threshold.

Reminder: The employer’s obligation to contribute to the cost of travel between the employee’s usual place of residence and place of work using public transport and public bicycle hire services. To benefit from this reimbursement, employees must provide a season ticket (single tickets are not reimbursable). 

Commuting time: actual working time?

Several recent court rulings have shed useful light on how to deal with “home-work” commuting times.

The French Supreme Court (Cour de Cassation) has ruled that should be considered as actual working time : “travel time between the employee’s home and the first and last customers, if the employee has to remain at the employer’s disposal and comply with his instructions without being able to go about his personal business“.

In one of the cases cited, the employee was obliged to answer business calls during his commute to and from work. His employer had equipped his company car with a “hands-free kit” for this purpose.

Finance Act 2024: what changes for non-professional furnished rentals?

Back in September, the French Minister of the Economy, Bruno LE MAIRE, clearly announced his intention to put an end to the tax advantages available to seasonal furnished letting in order to combat the housing crisis in France.

Although the initial finance Act project contained no measures relating to this rental activity, two amendments were finally tabled in mid-October. Here are the changes to be expected should the bill be passed as it stands:

Classified furnished tourist accommodation under the micro-BIC scheme

The micro regime is characterized by a simplified calculation of taxable income, with the simple deduction of a flat-rate allowance for expenses. Here is a summary of the changes brought about by the vote on the next Finance Act:

• Before the Finance Act for 2024: 71% allowance for expenses and annual turnover threshold to qualify: under €188,700.
• After the vote on the Finance Act for 2024: 50% allowance for expenses* and annual turnover threshold to qualify: under €77,700.

*In exceptional circumstances, the deduction for expenses may be increased to 71% for classified furnished tourist accommodation located in non-tensioned rural areas, provided that gross rental does not exceed €50,000.

It should be noted that this amendment has no impact on owners who declare their income under the actual tax system (régime reel) for furnished lettings.

Reintegration of depreciation in the calculation of real estate capital gains

This amendment concerns furnished tourist rentals subject to the actual tax system. Until now, owners of such properties have benefited from a real tax singularity, since they could deduct depreciation throughout the property’s, and not take it into account when calculating the taxable capital gain on resale.

Subject to the passage of the Finance Act in its current wording, from 2024 onwards, capital gains on real estate will be increased by accumulated depreciation.
We remind you that this amendment only concerns furnished tourist accommodation.

The Finance Act for 2024 will be voted on by December 31, 2023. We will keep you informed of developments in the coming months.

Société d’Exercice Libéral held by an SPFPL: attention to social charges

In a ruling handed down on October 19, 2023, the French Supreme Court (Cour de Cassation) ruled that dividends paid by a société d’exercice libéral (SELARL, SELAS) to its holding company SPFPL (Société de Participations Financières de Professions Libérales) are treated as professional income and must be included in the basis for calculating the individual partner’s social security contributions.

This decision raises a number of questions for self-employed professionals in particular, as it subjects to social security contributions dividends that were not directly received by individuals… Please do not hesitate to contact us if you would like to be put in touch with legal professionals who have arguments to counter this decision.