Tax reductions in France have a direct impact on income tax to pay; they reduce it. If the total amount of the tax credits is higher than the income tax owed, the differential is not reimbursed by the French Tax Administration to the taxpayer, it not refunded, except tax reductions for donations to charitable organizations, which are carried over.

The main tax reductions are the following:

  1. Donations and grants to a charitable organization
  2. Employment costs of an employee at home
  3. Purchase of capital of small and medium enterprises
  4. Subscription to mutual fund units for innovation (FCPI – Fonds Commun de Placement dans l’Innovation)
  5. Purchase of vicinity investment funds (FIP – Fonds d’investissement de proximité)
  6. Purchase of capital of Soficas;(Movie companies)
  7. Interest on a loan for the takeover of small and medium enterprises
  8. Investment ” Duflot ” (real estate investment)
  9. Investment “Scellier” (real estate investment)
  10. Investment in Property restoration operations ” Malraux ” (real estate investment)
  11. Conservation work or restoration of objects classified as historic monuments (real estate investment)
  12. Rental property investment in the tourism sector (real estate investment)
  13. Rental investments in apartment hotels with a social purpose (real estate investment)
  14. Investment in the forest sector
  15. Dependent children’s school fees (Secondary, High School and College, University)
  16. Compensatory benefits(in case of judgment of divorce or conversion)
  17. Premiums paid to “survival annuities” or to ” disability savings “contracts (rente-survie: Epargne Handicap)
  18. Residential living expenses for dependents
  19. Assistance to people who set up or take over a business
  20. Interest earned on transfer of a farm with deferred payment
  21. Contributions for the prevention of forest fires
  22. Expenses for conservation/preservation or restoration of art (classified masterpieces)
  23. Acquisitions of national treasures;
  24. Bookkeeping and membership fees paid by members of approved management centers and associations- Centre de gestion agréé
  25. Nonprofessional rental investments in furnished residences
  26. Investment in the overseas departments