OUR ADVICE – The limitation mechanism aims to prevent your total taxes from exceeding 75% of your annual income. Here’s how to benefit from it.
The cap mechanism aims to prevent your total taxes from exceeding 75% of your previous year’s income. In this case, the excess is charged to your household’s IFI. A good way to reduce the latter, so it’s worth seeing if you qualify to benefit from it. Its calculation principles can be found below, however, the evaluation is complex, it is advisable to seek the help of an expert.
Note that the ceiling applies to IFI taxpayers who are tax domiciled in France and to non-residents who receive all or almost all of their income in France.
Taxes to be added to the IFI
To check if you qualify for the restriction, you need to add the taxes and social security contributions due on your previous year’s income to your IFI.
- Income tax
The tax to be taken into account is the tax payable in France or abroad on the income received in the previous year by each member of your tax household within the meaning of MFI. It is not easy in…