France to question Airbnb over possible tax avoidance scheme

The French government has summoned the managers of Airbnb to demand answers over a payment system suspected of facilitating tax avoidance.

France to question Airbnb over possible tax avoidance scheme
Photo: DPA
Speaking in parliament on Tuesday, Budget Minister Gerald Darmanin said he had become aware of the “possibility” of (fiscal) “optimisation or even complicity in laundering” offered by Airbnb and had called the company's bosses to a meeting next week.
Finance Minister Bruno Le Maire will also attend the meeting about the prepaid Payoneer card, which homeowners can use to receive payments for their rentals — without the money transiting through their bank accounts.
Airbnb paid French tax man just €93,000
Photo: AFP
Darmanin said he asked tax authorities to look into the system and check whether payments received on the cards were being declared for tax purposes.
France Info radio revealed last week that Airbnb was offering owners the option of being paid by Payoneer instead of by bank transfer.
Payoneer, based in New York, is a financial services company with a European subsidiary in Gibraltar.
Several online retailers, including Amazon, accept Payoneer cards as a payment option.
In a statement sent to AFP, Airbnb said it made nearly 90 percent of its payments in France via bank transfer.


Local authorities in France get power to crack down on Airbnb rentals

Authorities in Paris and other French towns will be able to regulate local businesses who wish to rent property on Airbnb, according to a decree published by the French government. 

Local authorities in France get power to crack down on Airbnb rentals
This illustration picture taken on July 24, 2019 in Paris shows the logo of the US online booking homes application Airbnb on the screen of a tablet. (Photo by Martin BUREAU / AFP)

The news was welcomed by authorities in Paris, who have long battled to keep a check on Airbnb and its impact on the rental market. 

On Sunday, the French government published a decree that allows the City of Paris to subject the renting of local businesses to prior authorisation. 

This decree applies to all types of offices, stores or medical offices who may be turned in holiday rentals. 

It aims to allow towns to limit the growth of rentals on Airbnb, “protect the urban environment and preserve the balance between employment, housing, businesses and services on their territory,” says the decree. 

The news was welcomed by authorities in Paris, which has been witnessing “the multiplication of ground floor business premises being transformed into holiday rentals,” said deputy mayor Ian Brossat, who is in charge of housing, in a press release

This decree which comes into effect on July 1st, “will prevent local businesses from being turned into holiday rentals,” Brossat added on Twitter.

The conditions businesses will have to meet in order to get an authorisation still have to be defined said Brossat, according to Le Figaro. But Paris aims to draft these regulations and get them voted by the end of 2021, so they can come into force at the beginning of 2022. 

Other towns allowed to apply the decree are those who have put into effect “the procedure of a registration number for furnished holiday apartments, owners and, subject to contractual stipulations, tenants of local businesses who wish to rent them as furnished holiday apartments.” 

In recent years, Paris city authorities have made tax registration obligatory for apartment owners and have restricted those renting out their primary residence to a maximum of 120 days a year.

Now if owners want to rent a furnished property for less than a year to holidaymakers, they must apply to local authorities for permission to change the registered use of the space.

They are then required to buy a commercial property of an equivalent or bigger size and convert it into housing as compensation. 

Until then, these onerous and time-consuming tasks did not apply to local businesses who only had to fill out a declaration.  

In February, France’s highest court, the Court of Cassation, ruled that regulations introduced to counter the effects of Airbnb and other short-term rental sites on the local property market were “proportionate” and in line with European law.