The French Tax Credit System (CIR)

Benefits and advantages for your company

France currently boasts the most advantageous tax system for R&D among OECD member states

The 9th European Innovation Funding Survey ranked France’s research tax credit as the leading innovation funding measure for European companies (Alma Consulting Group, 2013). France is the country that offers the most generous R&D tax treatment for companies (OECD Science, Technology and Industry Scoreboard, 2013). France has the lowest effective corporate tax rate in the world (among the 10 countries surveyed) for R&D operations, taking into account differences in tax bases, depreciation allowances, tax exemptions and tax credits (KPMG, Competitive Alternatives, 2014).

France's research tax credit covers 30% of all R&D expenses up to €100 million, and 5% above this threshold. Salaries for research staff are wholly integrated, plus 50% of R&D operating costs and 75% of investments in R&D operations.

ICM is part of the few non-profit foundations for which tax credit rate for R&D expenditure is doubled, reaching 60% of all research costs.

All companies incurring R&D expenses are eligible, regardless of their size, business sector and nationality. The research tax credit base covers not only all R&D spending (salaries, social security contributions, amortization and depreciation allowances, operating costs, subcontracting, patents and monitoring, etc.) but also innovation expenses incurred by SMEs, at a rate of 20% (up to €400,000 a year).

All expenditure contracted out to public-sector bodies is double-counted, thereby effectively doubling the research tax credit (up to €12 million). Salaries paid to junior final-year doctoral and post-doctoral research personnel on their first permanent contract are quadruple-counted for two years. 

SMEs, innovative new companies (jeunes entreprises innovantes – JEIs), startups and ailing companies may ask for an immediate research tax credit rebate. Bpifrance, France’s public investment bank, offers a pre-financing solution covering 80% of expected eligible expenses (for companies based in France for more than three years, having previously received the research tax credit).

Eligible companies can enjoy combine the benefits of the research tax credit with those of the “innovative new companies” scheme (jeunes entreprises innovantes – JEIs), which provides for corporate tax, local taxes and social security contributions over an eight-year period, as well as all other tax incentives (e.g. the CICE tax credit).

To know more