The investment security sale earnings governed by article 92 B of the French General Tax Code and taxable at a fixed rate according to Article 200 A of the above-mentioned code are not part of the composition of the global net income mentioned in Articles 1st and 13-2 of the French General Tax Code on which may be allocated, by application of Article 156-1 of the same code, a loss noticed in a category of incomes.

Therefore, a request for the allocation of a loss, noticed in the category of the industrial and commercial earnings on profits aimed at by Article 92 B, has be rejected (Administrative Court of Appeal of Nancy, December 28, 1995, no. 94-1449).


1) The Administrative Court of Appeal of Nancy has already judged that the capital gains of investment security sale taxable to income tax at a proportionate rate are excluded from the taxable income. This position led the Tax Authorities to refuse:

  • the taking into account, for the determination of the limits within which gifts give right to a tax profit;
  • the offset on these incomes of the deduction for investments in the overseas regions of France (Administrative Court of Appeal of Nancy, December 26, 1991, no. 627).

As an effect of this case law, in the present case, the Court dismisses the offset of a sectional loss on capital gains of social rights sale.

In this case, the taxpayer highlighted that the disputable gains compose the global income as non commercial profits. In support of this argumentation, he took advantage of Articles 1st and 13-2 of the French General Tax Code defining the global income as the sum of the sectional incomes and authorizing the taking into account of the losses. But the Government Commissioner considered that these two articles, following their interpretation, must be considered as excluding from the global income notion the taxable bases at a fixed or proportional rate and only authorizing the deduction of the losses on taxable incomes at a progressive scale.

Based on the fixed nature of the tax rate, the position of the Court of Nancy appears to be transposable to other gains considered as non commercial profits and taxed according to the same conditions (especially those aimed at by Articles 92 B bis, 92 B quater, 92F, 92 H and 92 K of the French General Tax Code).

2) It is to be reminded that the Tax Authorities recently adopted the same position as the Court.

3) The taxpayer appealed against the present decision.

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