The taxation of para-hotel services: the complete guide

Para-hotel services consist of the letting of furnished premises combined with services supplied under conditions similar to those of the hotel trade. Whereas furnished letting is in principle exempt from VAT (article 261 D, 4° of the French Tax Code), para-hotel activity falls within the exception of article 261 D, 4°-b and is subject to VAT. The decisive criterion is not the nature of the property, but the existence of genuine para-hotel services.

The four reference services are: breakfast, regular cleaning of the premises, supply of household linen and reception of guests, even where not personalised. Since the Finance Act for 2024, article 261 D, 4°-b of the French Tax Code provides that the provision of furnished premises combined with at least three of these four services, for a period not exceeding thirty nights, brings the activity within the para-hotel field subject to VAT.

Yes. Once the activity is characterised as para-hotel, it falls outside the exemption of article 261 D, 4° of the French Tax Code and becomes subject to VAT. In return, this liability opens a right to deduct the VAT borne on investments (acquisition, works, furniture) and on operating expenses. The precise regime, together with the scope of the Conseil d'État decision of 12 November 2025, is detailed in our analyses para-hotel VAT and the BOFiP and the ruling of 12 November 2025.

In its decision of 5 July 2023 (no. 471877), the Conseil d'État held part of article 261 D, 4°-b of the French Tax Code incompatible with the VAT Directive, insofar as it rested on cumulative conditions that were too rigid. That decision led to a legislative alignment of the provision, which refocuses the analysis on the genuine supply of services under conditions similar to the hotel trade. Subsequent case law, including the decision of 12 November 2025, has clarified these conditions.

Para-hotel income falls within the category of industrial and commercial profits (BIC). The lessor may opt for the actual-profit regime and deduct expenses, as well as the depreciation of the building and furniture, which significantly reduces taxable income. Depending on the level of receipts and the conditions of article 155, IV of the French Tax Code, the activity is carried on as a non-professional lessor (LMNP) or a professional lessor (LMP), which changes the treatment of losses in particular. See our page para-hotel services, LMNP, LMP and income tax.

Ordinary furnished letting is limited to the provision of an equipped dwelling and remains exempt from VAT (French Tax Code art. 261 D, 4°). Para-hotel services add services (breakfast, cleaning, linen, reception) under conditions close to the hotel trade, which brings the activity within the scope of VAT and entails consequences in terms of social security and CFE. The dividing line therefore lies in the nature and genuineness of the services, detailed on our pages taxation of furnished lettings and para-hotel characterisation.

Yes, above a receipts threshold. As para-hotel services constitute an activity of a commercial nature, they trigger social security affiliation where annual receipts exceed 23,000 euros, pursuant to article L. 611-1 of the French Social Security Code. The applicable regime (self-employed or general regime) depends on the nature and intensity of the services supplied. See our analysis of social security contributions on para-hotel services.

Yes. Para-hotel services constitute a professional activity carried on on a regular basis: they are in principle subject to the business property levy (CFE), like any commercial activity. This levy comes on top of the consequences in terms of VAT, income tax and social security contributions, which justifies an overall analysis of the project before it is set up.