The research tax credit (CIR) is a tax system to support the research and development (R&D) activities of companies in France like industrial, commercial and agriculture enterprises, without restriction of sector or size. It aims to encourage companies to develop their research and development activities by providing them with tax assistance.
When doing business with RIC you can benefit from the CIR by deducting the R&D expenses from your tax under certain conditions.
To be eligible for the CIR, expenditure must correspond to research operations located within the European Economic Area (EEA): Austria, Belgium, Bulgaria, Cyprus, Croatia, Denmark, Spain, Estonia, Finland, France, Greece, Hungary, Ireland, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Norway, Netherlands, Poland , Portugal, Czech Republic, Romania, Slovakia, Slovenia, Sweden, except for technological watch and patent defense expenses. They must also have been used to determine the taxable result for income or corporate tax.
The following expenses are eligible for the CIR:
- Depreciation of goods and buildings allocated to research
- Staff costs for researchers and research technicians (the salary of young doctors is taken into account for the double of its amount for 2 years after their hiring in
- Additional remuneration for employees who have invented an invention
- Operating expenses, fixed at a flat rate of 75% of depreciation allowances and 43% of staff expenses (200% for expenses relating to young doctors)
- Research expenses entrusted to organizations approved by the French Ministry of Research (limited to 3 times the total amount of other research expenses giving rise to the right to the tax credit)
- Patent fees
- Standardization expenses of the company’s products (for 50% of the amount)
- Technology watch expenses (€ 60,000 per year maximum)
- Expenditure on new collection in the textile-clothing-leather sector
More information can be found here.