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Research Tax Credit (CIR)

Verified 23 novembre 2020 - Directorate for Legal and Administrative Information (Prime Minister)

The Research Tax Credit (IRB) is a generic measure to support business research and development (R&D) activities, without sector or size restrictions. Undertakings which incur expenditure on basic research and experimental development may benefit from the CIR by deducting it from their tax under certain conditions. The IRB rate varies depending on the amount of the investment.

Industrial, commercial, craft and agricultural enterprises, whatever their legal status.

It must be subject to corporate or income tax in the class of BIC and be taxed on the basis of its actual profit (normal or simplified).

The company exempt from corporate tax is excluded from the scheme, except the young innovative company (JEI), the company created for the takeover of a company in difficulty and the company located in assisted area, etc.

An undertaking with less than 250 employees who has an annual turnover of less than 50 000 000 or whose total balance sheet is less than 43 000 000 may be entitled to the RIF. They will need to incur innovation costs related to prototype design activities or pilot facilities for new products in order to benefit from them.

The activities covered by the RIC are research and development activities (e.g. basic research, applied research or experimental development).

In order to be eligible for the RIC, expenditure must correspond to research operations located within European Economic Area (EEA) , except for expenditure on technological monitoring and patent protection. They must also have been withheld to determine the taxable income from income or corporation tax.

The following expenses are eligible for the RIC:

  • Depreciation allowances for research assets and buildings
  • Staff costs for researchers and research technicians (the salary of young doctors is taken into account for twice its amount for 2 years after their hiring in CDI)
  • Additional remuneration of employees who have invented an invention
  • Operating expenditure fixed at flat rate at 75% depreciation allowances and 43% staff costs (200% expenditure on young doctors)
  • Outsourced research expenditure, entrusted to any public body, university, recognized public utility foundation, 1901 association having as its founder and member a research organization or a university, expenditure withheld for twice their amount (provided that there is no link between the organization and the company)
  • Research expenditure entrusted to recognized organizations by the Ministry of Research (limited to 3 times the total amount of other research expenditures eligible for the tax credit)
  • Patent fees
  • Expenditure on standardization of the company's products (for 50% amount)
  • Technological monitoring expenditure (€60,000 per year maximum)
  • Expenditure on new collections in the textile-clothing-leather sector

  FYI : research expenditures on agricultural experimental stations and farms are doubled.

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In mainland France

The rate of the research tax credit varies with the amount of research expenditures:

  • If research expenditure is less than €100 000 000, then the rate will be 30%
  • If the research expenditure exceeds €100 000 000, then the rate will be 5%.

The CIR is determined by calendar year, irrespective of the closing date of the financial year.

Public grants received for research projects eligible for the RIC must be deducted from the bases for calculating the credit.

Reimbursable grants are added to the calculation bases for the year they are reimbursed.

Overseas Department

The rate of the research tax credit varies with the amount of research expenditures:

  • If research expenditure is less than €100 000 000, then the rate will be 50%
  • If the research expenditure exceeds €100 000 000, then the rate will be 5%.

The CIR is determined by calendar year, regardless of the year-end date.

Public grants received for research projects eligible for the RIC must be deducted from the bases for calculating the credit.

Reimbursable grants are added to the calculation bases for the year they are reimbursed.

Corsica

The rate of the research tax credit varies with the amount of research expenditures:

  • If research expenditure is less than €100 000 000, then the rate will be 50% for expenditure incurred in respect of accounting periods ended from 31 December 2019 otherwise it will be 30%.
  • If the research expenditure exceeds €100 000 000, then the rate will be 5%.

The CIR is determined by calendar year, regardless of the year-end date.

Public grants received for research projects eligible for the RIC must be deducted from the bases for calculating the credit.

Reimbursable grants are added to the calculation bases for the year they are reimbursed.

To qualify for the tax credit, a company must attach the 2069-A-SD form to its income tax return:

  • Serving business taxes (EIS),
  • To the Directorate-General for Research and Innovation (DGRI) of the Ministry of Higher Education and Research

Research tax credit

Cerfa n° 11081*21 - Ministry of Finance
Other number : 2069-A-SD

If research expenditure exceeds EUR 100 million (for declarations lodged) from 1to January 2020), the company must accompany its 2069-A return with Form 2069-A-1-SD.

Failure to do so shall be punished by a fine of €1,500..

To find out whether its research project is eligible for the RIC, the company can make a prior written request to the administration.

The administration's response time to a request for a RIC is 3 months.

The tax credit is applied against income or corporate taxes owing by the business for the year in which the research expenditures occurred.

In the event of impossibility of imputation on a profit too low, for example, the unimputed excess credit constitutes a claim on the State, which may be used for the payment of tax due for the following 3 years.

At the end of this 3-year period, the claim is refundable.

Immediate return

The early repayment of the claim of the CIR, without the period of default of 3 yearsis possible for the following companies:

  • New enterprises (the year of creation and the following 4 years)
  • Collective proceedings (conciliation, safeguard, reorganization or liquidation)
  • Young Innovative Enterprises (JEI)
  • Enterprises with less than 250 employees, with a turnover of up to EUR 50 million (or an annual balance sheet of up to EUR 43 million)

The company created less than 2 years is required to accompany its claim for reimbursement of research expenditure: contracts, invoices, reporting DADS and payslips, etc.