Research Tax Credit (RIC)

An industrial, commercial, craft and agricultural company, whatever its legal status, may benefit from it.

It must be subject to business tax or income tax in the BIC: titleContent and be taxed on its actual profit (normal or simplified).

The company exempt from business tax is excluded from the scheme, except for the young innovative company (JEI), the company set up to take over a company in difficulty and the company located in an assisted area.

A company with less than 250 employees that has an annual turnover of less than €50 000 000 or whose total balance sheet is less than €43,000,000 may be entitled to the CIR. They will have to incur innovation costs related to prototype development or pilot installations of new products in order to benefit from them.

The activities covered by the CIR are research and development activities (e.g. basic research, applied research or experimental development).

To be eligible for the CIR, expenditure must correspond to research operations located within the the European Economic Area (EEA), except for technology watch and patent defense expenditure. They must also have been used to determine taxable income or business income.

The following expenditure shall be eligible for the CIR:

• Depreciation allowances on property and buildings used for research purposes
• Staff costs of researchers and research technicians (the salary of young doctors is taken into account for twice its amount for 2 years after their recruitment in DTA: titleContent)
• Supplementary remuneration of employees who invent
• Operating expenditure, fixed at a flat rate at 75% depreciation charges and 43% staff costs (200% for expenditure on young doctors)
• Research expenditure entrusted to recognized organizations by the Ministry of Research (limited to 3 times the total amount of other research expenditure eligible for the tax credit)
• Patent fees
• Expenditure on standardization of company products (for 50% of the amount)
• Technology Watch Expenses (€60,000 per year maximum)
• Expenditure and development of new collections in the textile-clothing-leather sector

In order to benefit from the tax credit, the company must attach form 2069-A-SD to its income statement and send it through an EDI (electronic data interchange) partner (EDI-TDFC mode)

Research tax credit

If research expenditure exceeds €100 million (for statements filed) from 1^er january 2020), the company must file form 2069-A-SD with the return 2069-A-1-SD.

Failure to do so shall be punished by a fine of €1,500.

To find out if their research project is eligible for the CIR, the company may file a prior request in writing to the administration.

The time limit for the administration to respond to a request for a CIR is 3 months.

The tax credit is charged against income tax or businesses payable by the company for the year in which the research expenses occurred.

If it is not possible to set off against a profit that is too low, for example, the excess credit that has not been set off constitutes a claim on the State, which may be used for the payment of the tax due for the following three years.

At the end of that three-year period, the debt is repayable.

The early repayment of the CIR's claim, without the waiting period of 3 years, is possible for the following companies:

• New companies (year of creation and subsequent 4 years)
• Companies in collective proceedings (conciliation, safeguard, recovery or liquidation)
• Young Innovative companies (JEI)
• Companies with less than 250 employees, with a turnover of up to EUR 50 million (or an annual balance sheet of up to EUR 43 million)

The company that was created less than 2 years must accompany the claim for reimbursement with proof of research expenditure: contracts, invoices, declaration DADS-U: titleContent and payrolls, etc.