French General Tax Code
In force1. When the tax authorities are informed, as part of the fight against undeclared lucrative activities that undermine public order and public security and under the conditions set out in articles L. 82 C, L. 101 or L. 135 L of the Book of Tax Procedures, that a taxpayer has items mentioned below, it may, in the event of a marked disproportion between his lifestyle and his income, increase the income tax assessment base to a lump sum determined by applying to this or these lifestyle items the scale below, taking into account, where applicable, the increase provided for in 2.
DELEMENTS OF LIVELIHOOD | BASIS |
1. Cadastral rental value of the main residence, less that applicable to business premises | Five times the cadastral rental value |
2. Cadastral rental value of second homes, less that applicable to business premises | Five times the cadastral rental value |
3. Motor cars used to transport people | The value of the new car with a 50% discount after three years of use or, in the case of a leased vehicle, five times the price including all taxes of the lease. |
4. Motorbikes over 450 cm³. | The value of the new motorbike with a 50% discount after three years of use. |
5. Sports and leisure clubs | Amount of expenditure. |
6. Travel, hotel stays, holiday rentals and related expenses | Amount of expenditure |
7. Household appliances, sound-hifi-video equipment, computer equipment | The value of the new property, where this exceeds €1,000. |
8. Articles of jewellery and precious metals | The market value of the property. |
The items used to determine the tax base are those disposed of, during the year of taxation, by the members of the tax household designated in 1 and 3 of article 6.
For items disposed of jointly by several persons, the base is set in proportion to the rights of each of them.
The income referred to in this article is that resulting from the taxpayer's declaration and, in the event of no declaration, it is counted as zero.
2. The lump sum determined in application of the scale is increased by 50% when the taxpayer has had more than four items of lifestyle listed in the scale.
For the purposes of assessing the number of items of lifestyle that the taxpayer has had, each item in categories 1 to 4 is counted as one. For categories 5 to 8, several items in the same category are counted as one.
3. The marked disproportion between a taxpayer's lifestyle and his income is established when the lump sum resulting from the application of the scale and the increase provided for in 1 and 2 is, for the year of taxation, at least equal to twice the amount of the total net income declared, including income that is exempt or taxed at a proportional rate or released from tax by the application of a levy.
4. The taxpayer can provide proof that his income or the use of his capital or the loans he has taken out have enabled him to maintain his lifestyle.
