2: Determining taxable income

The net amount of taxable income is determined by deducting from the gross amount of sums paid and benefits in money or in kind granted:

1° Social security contributions, including:

a) Old-age insurance contributions paid in exercise of the redemption options provided for in articles L. 351-14-1 of the Social Security Code, L. 9 bis of the code des pensions civiles et militaires de retraite, as well as those provided for by regulatory provisions having the same purpose adopted on the basis of article L. 711-1 of the Social Security Code;

b) Contributions paid to the supplementary pension schemes mentioned in chapitre Ierdu titre II du livre IX du code de la sécurité sociale;

c) Contributions to the compulsory additional public pension scheme instituted by article 76 of law no. 2003-775 of 21 August 2003 reforming pensions ;

1° 0 bis Contributions paid in accordance with the provisions of Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons and their families moving within the Community or in accordance with the stipulations of an international convention or agreement on the application of social security schemes;

1°a (Repealed)

1°b (Repealed as from the entry into force of the loi n° 2002-73 du 17 janvier 2002).

1° quater Contributions or premiums paid to compulsory and collective supplementary provident schemes, within the meaning of the sixth paragraph of Article L. 242-1 of the Social Security Code, provided that, where these contributions or premiums finance cover for the reimbursement or compensation of expenses incurred as a result of sickness, maternity or accident, such cover complies with the conditions set out in Article L. 871-1 of the Social Security Code. The same applies to contributions or premiums paid by public employers and their employees to collective supplementary social protection contracts for which employee subscription is made compulsory pursuant to an agreement provided for in article L. 827-2 of the General Civil Service Code or in application of the decree mentioned in II of Article L. 4123-3 of the Defence Code.

The contributions or premiums mentioned in the first paragraph mean, in the case of contributions payable by the employer, those corresponding to guarantees other than those relating to the reimbursement or compensation of expenses caused by illness, maternity or accident.

Employer-paid contributions corresponding to cover for the reimbursement or compensation of expenses incurred as a result of illness, maternity or accident are added to the remuneration taken into account to determine the tax bases.

The contributions or premiums deductible in application of the first and second paragraphs are deductible up to an amount equal to the sum of 5% of the annual amount of the ceiling mentioned in article L. 241-3 of the Social Security Code and 2% of the gross annual remuneration, without the total thus obtained exceeding 2% of eight times the annual amount of the aforementioned ceiling. Any excess is added to the remuneration.

2° Contributions or premiums paid to supplementary pension schemes, including those managed by an institution mentioned in article L. 370-1 of the Insurance Code for the contracts mentioned in l'article L. 143-1 of the said code when their purpose is the acquisition and enjoyment of lifetime rights, to which the employee is compulsorily affiliated, as well as the contributions paid, as from 1st January 1993, on a compulsory basis to the provident scheme for professional football players instituted by the professional football charter.

The same applies to the payments mentioned in 3° of article L. 224-2 of the Monetary and Financial Code into a retirement savings plan mentioned in article L. 224-13 or article L. 224-23 of the same code.

The payments mentioned in the previous paragraphs are deductible up to a limit, including employer payments, of 8% of the gross annual remuneration withheld up to eight times the annual amount of the ceiling mentioned in article L. 241-3 of the Social Security Code. In the event of a surplus, this is added to the remuneration;

The limit mentioned in the third paragraph is reduced, where applicable, by sums paid into retirement savings plans which are exempt pursuant to 18° of Article 81;

2°-0 bis (Repealed) ;

2°-0 ter Within the limits provided for in the fourth paragraph of 1° quater, contributions paid to supplementary provident schemes and, within the limits provided for in the third and last paragraphs of 2°, contributions paid to supplementary pension schemes meeting the conditions set out in Article 3 of Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community or those set out in international social security conventions or agreements, to which the persons designated in 1 of I of article 155 B were affiliated in their official capacity in another State before taking up their post in France. The contributions are deductible until 31 December of the eighth year following the year in which they took up their post;

2°-0 quater The contribution provided for in Article L. 137-11-1 of the Social Security Code up to the fraction paid in respect of the first €1,000 of monthly annuity;

2° bis Contributions paid by employees pursuant to the provisions of Article L. 5422-9 of the Labour Code and intended to finance the insurance scheme for workers deprived of employment;

2° ter (Repealed).

2° quater (Repealed).

2° quinquies (Repealed).

3° Expenses inherent to the function or employment when they are not covered by special allowances.

The deduction to be made in respect of professional expenses is calculated on a flat-rate basis according to gross income, after deduction of the contributions, contributions and interest mentioned in 1° to 2° ter; it is set at 10% of the amount of this income. It is limited to €13,522 for taxation of remuneration received in 2022; each year, the ceiling used for taxation of the previous year's income is increased in the same proportion as the upper limit of the first bracket of the income tax scale.

The amount of the flat-rate deduction for professional expenses may not be less than €472, without being able to exceed the gross amount of salaries and wages. This provision applies separately to the remuneration received by each member of the tax household designated in 1 and 3 of article 6.

The sum shown in the third paragraph is revised each year in the same proportion as the upper limit of the first bracket of the income tax scale.

Beneficiaries of salaries and wages are also allowed to justify the amount of their actual expenses, either in the declaration referred to in article 170, or in the form of a claim sent to the tax department within the time limit set out in articles R* 196-1 and R* 196-3 of the tax procedures book. The amount of actual expenses to be taken into account in respect of the acquisition of buildings, vehicles and other assets with a useful life of more than one year refers to the depreciation that these assets have undergone during the tax year.

Expenses incurred with a view to obtaining a diploma or professional qualification with a view to professional integration or conversion by persons earning an income from the practice of a sport are treated in the same way as actual professional expenses.

Travel expenses of less than forty kilometres between home and place of work are allowed, on production of supporting documents, as actual professional expenses. Where the distance is greater, the deduction allowed is for the first forty kilometres, unless there are special circumstances, particularly relating to the job, justifying full allowance. The travel expenses referred to in this paragraph incurred by a passenger in the context of sharing expenses as part of a car-sharing scheme as defined in article L. 3132-1 of the Transport Code are allowed, on production of supporting documents, as actual business expenses.

When recipients of wages and salaries opt for the actual expenses system, the assessment of travel expenses, other than toll, garage or parking charges and annual interest relating to the purchase on credit of the vehicle used, may be carried out on the basis of a flat-rate scale set by order of the minister responsible for the budget on the basis of the administrative power of the vehicle, retained within the maximum limit of seven horsepower, the type of engine of the vehicle, and the annual distance travelled.

When the beneficiaries mentioned in the eighth paragraph do not apply the said scale, the actual deductible expenses, other than toll, garage or parking charges and annual interest relating to the purchase on credit of the vehicle used, may not exceed the amount that would be allowed as a deduction in application of the aforementioned scale, for the same distance travelled, for a vehicle with the maximum administrative power retained by the scale.

Expenses, duties and loan interest paid to acquire or subscribe to shares in a company engaged in an industrial, commercial, craft, agricultural or liberal profession in which the employee or manager carries out his or her main professional activity are deductible, on production of supporting documents, as actual professional expenses provided that these expenses are useful for the acquisition or preservation of his or her income. The interest deductible is that part of the loan whose amount is proportionate to the annual remuneration received or expected at the time the loan is taken out. The remuneration taken into account refers to the income mentioned in article 79 and taxed on the basis of this article. The fraction of payments made in respect of subscriptions or acquisitions of securities giving rise to the tax reductions provided for in articles 199 terdecies-0A, 199 terdecies-0 AB or 199 terdecies-0 B, as well as subscriptions and acquisitions of securities included in a share savings plan defined in article 163 quinquies D or in an employee savings plan provided for in title III of Book III of Part Three of the French Labour Code, may not give rise to any deduction of loan interest.