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Research Tax Credit Research Tax Credit FRS Consulting (c)

Research Tax Credit

The French Research Tax Credit (Crédit d’Impôt Recherche, CIR) is a fiscal measure designed to aid companies’ Research & Development (R&D) efforts. It allows a tax reduction based on R&D expenditures incurred

Created in 1983 and amended several times by the 2008 financial law, the CIR is a valuable financial tool for SMEs. It is calculated based on the claimed annual volume of R&D expenditures incurred, regardless of the closing date on the accounts. The Research Tax Credit is a net resource for the company as it is either directly deducted from the tax to be paid (Corporate or Income tax) or it is immediately refunded (for the European definition of SMEs which have < 250 employees and < EUR 50 million in revenues.)

Tax Credit rates :
  • 30 % of R&D expenditures up to EUR 100 million
  • 5 % of R&D expenses beyond the threshold of EUR 100 million

Which companies are eligible for CIR?

Any commercial, industrial or agricultural company in France whether it is subject to Corporate or Income tax in the BIC categories (Bénéfices Industriels et Commerciaux/ Commercial and Industrial Profits).

Definition of R&D

R&D activities are divided into three categories :

  • Activities which are considered as being fundamental research
  • Activities which are considered as applied research
  • Experimental development activities (which are carried out via prototypes or pilot installations).

The R&D work must lead to substantially increased knowledge in the sector without any specific conditions of success.

Which expenses are eligible ?

  • Personnel expenses
  • Subcontracted R&D expenses
  • Patent expenditures
  • Depreciation charges on research materials
  • Expenses for technological intelligence

The 2013 Financial Law provides the opportunity to request an opinion prior to submission.

Read 10593 times Last modified on 02 July 2017

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