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French Finance
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 27/05/2008, 22:10
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Russethouse
 
Joined on 23/08/2004
Forum Moderator
Posts 9,955
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Re: Exchange rate for Tax purposes
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Isn't the key, 'got it in writing' ? Whatever you do in years to come you may be asked to substantiate it, its no good just saying 'oh the blonde lady in the tax office told me'
www.quimperclub.org
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28/05/2008, 8:38
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allanb
Joined on 04/09/2006
Posts 557
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Re: Exchange rate for Tax purposes
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 BobDee wrote: | | How can an accountant be more correct than the local tax office? If you send in a request or visit a tax office and ask what the rate is, and get this response in writing, HOW CAN THIS BE WRONG? |
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Well, for one thing, because if you used the method prescribed by law you would finish up with different rates for different transactions. So I would add one thing: if a tax official says you can use a particular rate, make sure that he specifies in writing which transactions his rate can be used for. Using Russethouse's example: even if you find the blonde lady, she may say "oh yes, but I was talking about pension income, not capital gains."
Subject to that, I agree with you. It would be interesting to ask the accountant in this case why he is giving that advice. Consistency may be the answer; nobody has yet said that their tax office will allow you to pick and choose from one year to the next (average rate one year, year-end rate the next, whichever suits you best).
Now there's a topic for the next twenty pages.
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28/05/2008, 8:39
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Catalpa
Joined on 23/08/2004
Southern Manche - 50
Posts 1,527
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Re: Exchange rate for Tax purposes
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28/05/2008, 9:49
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Ron Avery
Joined on 29/11/2004
Aveyron 12
Posts 3,297
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Re: Exchange rate for Tax purposes
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| BobDee wrote: | |
How can an accountant be more correct than the local tax office? If you send in a request or visit a tax office and ask what the rate is, and get this response in writing, HOW CAN THIS BE WRONG?
BobD |
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You obviouisly don't know local tax offices Bob, you can see from the variety of answers given here that many tax officials have not got a clue and just give any answer. As we said before if the "official" rate was given as 1.50€ how many would have taken it as "official" without question. Also it depends what the question is.
A What is the exchange rate for 2007, I received all my interest in sterling on 31 December? Perhaps 1,363€
B What is the exchange rate for 2007, I received monthly payments on the last day of each month? Perhaps 1,45€
Why not post a sensible answer, people will appreciate it more
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28/05/2008, 19:29
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Roz
Joined on 17/02/2008
79
Posts 24
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Re: Exchange rate for Tax purposes
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I emailed the same office where BobDee was quoted 1.3636 infotax-southwest@dgfip.finances.gouv.fr" in order to get something "in writing" I added: "For the purpose of calculating pension received from UK" and was told 1.4237.. it's clearly a minefield!
This place is like my favourite fudge: mostly sweet with a few nuts!
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28/05/2008, 22:16
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sueyh
Joined on 06/10/2004
62
Posts 207
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Re: Exchange rate for Tax purposes
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I have calculated mine laboriously month by month using the rate I got on 1st day of each month with Nationwide. That eventually averaged out at 1.46 over the year.
Suey
I'd rather be safe than sorry.
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29/05/2008, 6:13
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BobDee
Joined on 17/08/2005
Reaup Lisse 47
Posts 118
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Re: Exchange rate for Tax purposes
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Not sure why I am writing this having promised my self to stay clear of Taxing matters, but lets assume one has a Nationwide Savings account that pays interest annually, and this interest arrives in your UK account, but you dont transfer it to France, how can you calculate a suitable exchange rate given that no true exchange occurred?
Granted your actual wealth increased by "X" on a certain date, but wealth where?
Back to the vino.
BobD
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29/05/2008, 7:16
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allanb
Joined on 04/09/2006
Posts 557
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Re: Exchange rate for Tax purposes
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| BobDee wrote: | | Not sure why I am writing this having promised my self to stay clear of Taxing matters, but lets assume one has a Nationwide Savings account that pays interest annually, and this interest arrives in your UK account, but you dont transfer it to France, how can you calculate a suitable exchange rate given that no true exchange occurred? |
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Not sure why I am writing this either, because it's already been stated many times, but just once more...
The answer is the same as for any other income that was originally received in a foreign currency.
If you want to comply with the law, and the instructions on your tax form, you convert at the market rate on the day you received the money. This means the day when it was credited to your account. (Exactly what is meant by "the market rate" is open to debate, but there are plenty of sources.)
On the other hand, if your tax inspector says he will accept a rate that's more favourable to you, fine. Just make sure it's documented.
That's it.
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France Forum » Legal and Finan... » French Finance » Re: Exchange rate for Tax purposes
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