R&D Tax Credit (In French: CIR or Crédit Impôt Recherche) is an incentivising measure set up in 1983. It has seen many reforms over the years. Its aim is to provide incentives for businesses to increase expenditure on R&D and thus to be able to recover some of their relevant expenses in the form of a Tax Credit. This is deducted from Company Tax or reimbursed.
At present, only 9000 French companies exploit these arrangements, although many Businesses could, without realising it, develop projects (whether current or potential) which would be eligible.
The successive reforms to the CIR, particularly those introduced in 2008, have made important changes, of which many potential beneficiaries are not fully aware.
Our teams can bring their expertise to bear on each element making up the CIR:
- ELIGIBILITY OF YOUR ORGANISATION
- henceforth, all businesses subject to company or income tax can benefit from CIR
- the arrangements are even open to certain businesses exempted from profits tax (Creative Start-Ups, Businesses in Urban Development Areas, in Corsica, or in Low Employment Areas...)
- PROJECT ELIGIBILITY
Our specialist consultants will help you to profit from their scientific knowledge and wide experience. In the majority of applications, we send the relevant authority a “tax decision” which helps to guarantee eligibility.
Eligible areas as defined by the Ministry of Research are as follows:
- fundamental research (analysis of structural properties, physical and natural phenomena)
- applied research (detection of possible applications of fundamental research and / or new solutions enabling the Business to reach an objective determined in advance)
- experimental development (elaboration of prototypes or pilot equipment, production of new materials, products, procedures for substantial improvements)
- SELECTION OF EXPENSES TO BE DEDUCTED
- our experts isolate deductible expenses for human resources and materials devoted to research, including sub-contracting
- expenses for defending patents or technological intelligence, as well as expenses committed to research organisations, universities or technical associations exercising a public function
- DRAWING UP DECLARATIONS
We give precise estimates of the fiscal savings realised:
- from now on, the tax reduction amounts to 30% of research expenses incurred over the year (50% for Businesses which are declaring CIR for the first time, 40% for those who declare for the second year), up to a limit of 100 M Euros
- above 100 M Euros, the Tax Credit is limited to 5%
PARTICULAR ARRANGEMENTS
For several years, businesses in the clothing and leather sectors have been able to benefit from a specific R&D Tax Credit covering expenses incurred in designing new collections, styles and prototypes.
However, the extension of this possibility is strictly regulated and includes exemptions from the general CIR scheme. Thanks to our expertise in this area, a large number of clients in the sector have been able to benefit from this scheme.
