- France counts 223 tax relief schemes on income tax, with a cost of 15 billion euros in 2024.
- A tax deduction benefits only taxable households, whereas a tax credit can benefit all taxpayers.
- Nearly half of non-taxable French households cannot recover the tax advantages tied to deductions.
223 schemes, 15 billion euros: what the report tallies
Two hundred twenty-three: that is the number of tax expenditures that the Council of the Legal Orientations on Public Finances, attached to the Court of Auditors, catalogs for income tax. Its report, made public at the end of September 2026 on the eve of the 2027 budget, estimates the cost of these tax shelters at about 15 billion euros in credits and deductions granted in 2024. Spread across roughly 40 million tax households, that would amount to several hundred euros per household, a mean that no one actually receives.
This figure should be read with caution. It covers only credits and reductions, whereas the total cost of all income tax expenditures exceeds 40 billion euros, i.e., 42 billion in 2024 according to budgetary estimates. Exemptions, allowances, and other mechanisms make up the difference. To cross-check the magnitudes, the reference remains the annex “Ways and Means,” volume II, of the finance bill.
Deduction or credit: the same benefit, two destinies
Everything hinges on one word.
A tax deduction can only reduce the tax owed to zero, never below. Donating to a charity illustrates this: the benefit, 66% of the amount donated up to 20% of taxable income, is deducted from a tax that, for a household that does not owe tax, does not exist. For 100 euros donated, a taxable household retrieves 66 euros, while a non-taxpaying household retrieves none. For charities that aid people in difficulty, the rate rises to 75% up to 1,000 euros, which leaves 250 euros for a donor who pays tax and 1,000 for a donor who does not.
The logic applies to rental investment, overseas territories, and most reductions within the code. Nearly half of households do not owe tax, and the advantage grows with income, since the heavier the tax bill, the more room there is to reduce it.
A tax credit follows a different mechanism: if the credit exceeds the tax owed, the state pays the difference. The credit for employing a domestic worker, the largest item among these schemes, is the most well-known example. From 2018, it was extended to all taxpayers, whether they pay tax or not. A non-taxable retiree who hires a domestic helper therefore receives a Treasury check, while the same retiree giving 100 euros to a charity receives nothing.
An accumulation that the Court finds difficult to defend
The Court notes that many provisions overlap on the same objective. Others have never been evaluated, and some cost almost nothing while remaining written into the code. The Council proposes to limit them in time and to evaluate them systematically.
In 2008, a parliamentary mission counted 189 such provisions for income tax.
Each provision serves its own clientele. According to the report, about 1.5 million households accumulate various provisions, while 400,000 households use them as part of an investment logic, mainly real estate or corporate support. All continue to chip away at state revenues, within the overall cap of 10,000 euros per household. This cap restricts the largest cumulative sums, but it does not alter the fate of the non-taxpaying household, which remains well below the limit.
The debate is lively about the right course. The liberal think tank Ifrap argues that the “non-taxable” portion of the credit for employing a domestic worker amounts to a windfall. The Observatory of Inequalities, for its part, recalls that these benefits mainly favor wealthier households.
Giving when you don’t pay tax
Donations remain useful to the association, which receives the full amount and issues a tax receipt. For the donor who does not pay tax, the real cost of a 50-euro donation remains 50 euros. They can, however, verify the credits and deductions that provide some refund, such as those for child care outside the home or for employing a domestic worker.
The 2027 Finance Bill affects this edifice only modestly. It lists 465 provisions and 88.3 billion euros of planned tax expenditures in 2026, across all taxes, with about 4 billion in revenue recoupment.
It caps the 10% deduction on pensions, but preserves the research tax credit, the home employment credit, and the Dutreil pact. The total amount of tax expenditures for 2027 has not yet been published, which prevents measuring the real effect of these adjustments.
Sources: inegalites.fr | senat.fr | ifrap.org
