Innovation Comes First
Innovation Comes First
Tax System: Best Research Tax Credit in Europe
Since January 1, 2008, France has been offering companies the best R&D tax credit in Europe.
The research tax credit (crédit impôt recherche – CIR) is a corporate tax relief measure based on R&D expenses incurred by firms operating in France.
This incentive helps to support companies’ R&D efforts and increase their competitiveness.
Applications can be made simply by completing a straightforward form to be submitted at the same time as the corporate tax return.
In 2009, businesses received €3.6 billion in research tax credits (compared with €1.4 billion in 2006).
France’s research tax credit is the best in Europe:
- It covers 50% of R&D expenses the first year, 40% the second year and 30% for subsequent years up to €100 million (and 5% of expenses above this threshold);
- A powerful instrument for encouraging partnership research in France and Europe: expenses incurred on operations subcontracted to French and European public-sector research bodies are assessed at 200%, which amounts to a doubling of the tax credit;
- All R&D expenses are taken into account (salaries, social security contributions, running costs, depreciation, patents, technology watch, etc.);
- Eligibility of an R&D project can be confirmed by the French Ministry for Higher Education and Research through the “advanced ruling” (rescrit fiscal) procedure prior to work beginning. The ministry must respond within three months following the request, after which time eligibility can be assumed.