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By Rick Mitchell
A draft amendment to a budget bill in France’s National Assembly would “discriminate” against online rental sites including Airbnb inc. by hitting them with a targeted tax of up to 5 percent of daily rental values, a national association said.
Joel Giraud, rapporteur general to the National Assembly’s budget committee, posted a Nov. 23 report on his official website that said he plans to propose a measure allowing local governments to tax Airbnb rentals from 1 percent to 5 percent of daily rental amounts, beginning next year. The proposal would amend the second 2017 revised budget bill, which the committee is discussing ahead of consideration by the full assembly later in the month.
Giraud’s draft amendment proposal comes as hotels have been pushing for a government crackdown on alleged violations by Airbnb of regulations in the tourism sector. The rapporteur has contended that practices by landlords on Airbnb and French site Abritel-HomeAway side-step an existing tax on tourist lodging.
Airbnb declined to comment.
A Nov. 24 email statement provided to Bloomberg Tax by the National Union for the Promotion of Vacation Rentals (UNPLV), which includes Airbnb and French site Abritel-HomeAway, said the tax proposed in Giraud’s draft amendment would distort competition in the tourism sector. It “profoundly discriminates against furnished rentals to the benefit of hotels” and will hurt the “attractiveness” of France as a tourist destination, it said.
Under France’s existing visitor’s tax on hotel stays—which is calculated based on the number of stars a hotel has—a stay at a five-star hotel is taxed at about 3 euros, while a stay at a one-star venue is taxed at 55 centimes, depending on the number of adult guests. Giraud has said Airbnb landlords get around this system because most of them don’t include a star rating in their listings.
The UNPLV said that if the draft amendment text became law, “travelers who reserve a simple furnished apartment would be taxed at 5 euros per night, the same amount as for a four-star hotel.”
The proposal contradicts President Emmanuel Macron’s vow to simplify standards and procedures, because it would allow local communities to apply different taxes. “It would undeniably complicate local taxation,” and “arbitrarily increase differences in treatment of vacationers” from one place to another, the union said.
By contrast, the union said it favors an automatic collection of a fixed-rate visitor tax by all platforms and internet sites for renters of vacation lodging.
Giraud is a member of President Emmanuel Macron’s La Republique en Marche party, whose majority in the National Assembly has allowed it to easily pass various tax and employment measures since Macron came to power in May.
The government presented its second revised 2017 budget bill on Nov. 15. The first 2017 budget revision passed Parliament on Nov. 14. That bill forces large businesses and multinational groups to pay a one-off “contribution” to help cover a multi-billion euro budget gap stemming from an October ruling that voided a controversial tax on dividends.
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