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Innovation Tax Credit

Innovation Tax Credit

The 2013 Financial Law extended the scope of the Research Tax Credit (CIR) to Innovation work. The objective of the Innovation Tax Credit (CII), intended only for SMEs, is to support companies that have specific expenses for innovation.

The Innovation Tax Credit (Crédit Impôt Innovation, CII), is deductible from Income or Corporate taxes to be paid for the year during which the expenditures were made. It applies to tax credits based on expenses incurred as of January 1, 2013.

The Innovation Tax Credit is 20% for expenditures up to EUR 400,000 per year, which is a maximum CII of EUR 80,000 per year.

Which companies are eligible?

The companies eligible for Innovation Tax Credit are those which satisfy the definition of micro, small and mid-size companies as defined in Annex 1 of (EU) Commission Regulation n° 800/2008 from August 6, 2008, and namely:

  • An entity, regardless of its legal form, which has an economic activity
  • Companies which have less than 250 employees and which the annual revenue does not exceed EUR 50 million or which the balance sheet total is not greater than EUR 43 million

What is Product Innovation ?

Only Product Innovation is eligible. Innovation of services, procedures, organisation and commercialisation are not accepted. A new product is a tangible or intangible good which satisfies both of the following conditions :

  • It distinguishes itself from previous or existing products by superior performances either on the technical side, the eco-design, its ergonomics or features.
  • At the beginning of the innovation project, it is not yet available on the common market.

Which expenses are eligible?

The expenses concerned by the CII are those for prototype conception or pilot installation operations for new products. A prototype is an original model which has all of the technical qualities and features of the new product or procedure. The pilot installation is the set of equipment or devices which allow a product or a procedure to be tested on a scale or in an environment similar to that of the real industrial world. Within this scope, the eligible expenses are as follows:

  • Personnel costs
  • R&D sub-contracting expenses
  • Patent fees
Read 4724 times Last modified on 01 July 2017

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