Dubbed the most attractive in Europe by the OECD, France’s R&D tax credits make launching a deeptech startup or investing in R&D even easier.
This package of tax credits allows certain companies to have their eligible expenses deducted from their taxes. The Research Tax Credit, Crédit d’impôt recherche (CIR), provides support for the R&D activities of companies of all sizes and from every sector, whether it’s a deeptech startup or a large corporation opening up an R&D center in France.
The CIR rate varies depending on the amount invested.
· 30% for research expenses up to €100 million of R&D activities
· 5% above that amount
· 20% for innovation activities (for SMEs only), up to €400k
Public subsidies (granted after innovation competitions, for example) for research projects allowing companies to qualify for the CIR must be deducted from the base of the credit calculation.
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WHo is it for
The basis for eligibility is investment in research and development within the European Economic Area. Company size and legal status have no bearing on eligibility. The CIR is not just for startups: innovative companies are eligible throughout their development whatever their corporate structure (SA, SARL, etc.) and whether they are subject to income (IR) or corporate tax (IS)
Here are a few questions that we are typically asked, along with our responses.
What happens if my company does not pay taxes (yet) ?
Generally speaking, the CIR is deducted from taxes due by the company. Any remaining non-deducted CIR can be offset against taxes owed for the subsequent three years. The unused portion of the tax credit is refunded after this period.
Additionally, the CIR is immediately refundable for SMEs (as defined in EU regulations), innovative startups (JEIs) and firms subject to amicable settlement or safeguard procedure, court-ordered reorganisation or winding up.
How is the research tax credit calculated?
The CIR is deducted from company taxes at a rate based on the size of investments made:
- For expenses under 100 million Euros, the deduction rate is 30%,
- For expenses over the threshold of 100 million Euros, the deduction rate is 5%
- For innovation activities (for SMEs only), the deduction rate is 20%
How long can I benefit from CIR?
There is no time limit to benefit from CIR. A company may apply for it every year that it qualifies for the program.
What expenses qualify under CIR?
- Technical staff ;
- operating expenses ;
- depreciation costs ;
- technological watch ;
- outsourced R&D expenses (subject to approval) ;
- industrial property and normalization expenses.