Tax policy directorate – Bureau a

IV – DETERMINATION OF TOTAL INCOME 
In principle, taxable income is determined by adding up the net income in each category available to a 
tax household during the year of taxation. 
TAXABLE INCOME IS A TOTAL INCOME 
This means that it includes all the net income of the members of a tax household in one or more 
categories of income. 
At the same time, losses in certain categories of income are set off, in principle, against other kinds of 
income and any overall loss can be carried over to the total income of the subsequent six years. 
However, there are certain exceptions. 
Property losses cannot be set off against total income except for the fraction resulting from expenditure 
other than loan interest, up to a limit of €10,700. The fraction that exceeds €10,700 or results from loan 
interest can be set off against income from property in the following ten years.
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Losses on an agricultural activity can be set off against total income only if the taxpayer's net income in 
other categories does not exceed a certain limit (this limit was €107,826 for income earned in 2017). 
Otherwise, agricultural losses can only be set off against agricultural profits over the following six 
years. 
Likewise, losses from the exercise in a non-professional capacity of activities treated as business or 
non-commercial profits for tax purposes may not be set off against total net income but only against 
profits from such activities carried out in the same year or in the following six years. 
Under the same conditions as taxpayers domiciled in France, those not domiciled in France may set off 
losses of the same origin against profits or income from French sources, provided that these losses are 
from French sources.
TAXABLE INCOME IS AN ANNUAL DISPOSABLE
INCOME 
The tax household is, in principle, taxed on its actual disposable income during the year (or tax period, 
if it derives from a non-salaried professional activity). 
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Article 71 of the 2017 Budget Act no. 2016-1917 of 29 December 2016. 
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However, property losses in respect of historic buildings can be set off against total income with no limit 
on the amount of said losses. 

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However, exceptional or deferred income may, under certain conditions, be taxed under the income 
splitting system (quotient familial), which alleviates the impact of progressive taxation. 
TAXABLE INCOME IS A NET INCOME 
For economic or social reasons, some personal expenditure of the tax household is treated for tax 
purposes either as expenses deductible from total income or as tax reductions or credits that represent 
a percentage of the capped amount of the expenditure. 
Court-ordered or statutory maintenance payments may be deducted from total income, in principle for 
the actual amount. Other exhaustively specified expenses may also be deducted, although the amount 
is generally capped.