Tax of Foreign Rental Income + allowable expenses

B

BrianS

Registered User
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Quick question for those renting foreign-owned property, I am considering a purchase of a property that I may use in addition to renting out for some periods of the year. As I understand it
  • any rental income I earn will be taxed in the country e.g. France so I will need to do a french tax return in this case
  • I will also declare this income (rent + expenses + tax paid) on my Irish Tax return so cannot be taxed twice
Scenario - If I look at a country like France it allows different types of deductible expenses off the rental income V's Ireland e.g. depreciation of property value over 30-40 years. So in theory the ' taxable profit' is reduced and allowable under French tax so instead of making a profit of 15K I can, for example, make a profit of 8K if I take depreciation of 7K into account.

My specific question is whether I would simply declare a profit of 15K or 8K on the Irish tax return i.e. if the expenses I declare are allowed in the foreign country are they also allowed here when declaring the income? Obviously I would need to pay any shortfall of income tax/prsi/usc but specifically, can I declare the expenses if they are allowed by the foreign country?

Will obviously bet getting advice (foreign + local) before I make any decisions, but just wanted to check if anyone had any experience of this?

Tks
 
Can't fully answer your specific question but would advise you to also check thoroughly the inheritance laws in France should illness/death happen to the owner of the property. I know of someone who had terrible issues relating to this when the owner died suddenly.
 
thanks yes have already been reading up on this definitely not straightforward alright.......
 
The allowable expenses are governed by the laws in each country and are often different

Some expenses can be fully allowed in France and not be allowed at all in Ireland or be only partially allowed and vice versa

You need to do the tax calculation separately for each jurisdiction - France first though and then the Irish one where you will get credit for some or all of the French tax paid
 
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