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Young Innovative or Academic company (JEI - GAME)

Verified 01 May 2022 - Directorate of Legal and Administrative Information (Prime Minister), Ministry of Economy

A new company that invests in research and development (R&D) has the status of a young innovative company (JEI) or a young university company (JEU).

It can benefit from tax and social exemptions.

JEI status has been extended to GAMES that constitute a particular JEI category.

Young Innovative company (JEI)

To be young innovative company (JEI), the company must meet the following conditions:

  • Be an SME: it shall less than 250 people and achieve turnover less than€50 million or total balance less than€43 million
  • For social exemption : it must have been created since under 8 years (the company definitively loses the status of JEI in the year of its 8th anniversary
  • For tax exemption : it must have been created since under 11 years (the company definitively loses JEI status in the year of its 11thth anniversary
  • It must R&D expenditure representative 15%charges. The calculation of this rate does not take into account the charges for disposals of shares or bonds, foreign exchange losses and charges against other JEIs carrying out R&D projects.
  • Its capital must be held for 50% minimum by any of the following:
    • Physical
    • Other JEI held at least 50% by natural persons
    • Recognised public service scientific association or foundation
    • Public research and teaching institution or any of its subsidiaries
    • investment business
  • She was not created within the framework of concentrationrestructuring, extension or resumption of existing activities

Please note

assessment of the 15% for a company operating one or more branches established in another Member State ofEU: titleContent orEEA: titleContent should take into account research expenses and expenses.

A company who wishes to know if she qualifies to be an innovative young company (JEI) can send to the tax authority request for opinion.

This request must be made taking into account the template next:

Template Request for Opinion JEI Status

It must be addressed by registered letter with acknowledgement or direct delivery to the Departmental Directorate of Public Finance on which the company depends:

Income Tax Exemption

A JEI may benefit from exemption from income tax equal to 100% when 1toprofit.

It can then benefit from a tax exemption on profits equal to 50% for next beneficiary year.

Warning  

this exemption applies only to fiscal years in which company meets the criteria to be a JEI.

Exemption of capital gains from the sale of shares

A JEI is exempt from tax on capital gains from disposal of shares if it meets the following conditions:

  • She practised option to benefit from this exemption
  • Shares or shares have been subscribed after 31 December 2003
  • The assigned securities were retained for at least 3 years during which the company had JEI status
  • The transferor of the securities, his or her spouse, ascendants or descendants did not hold more than 25% rights in the profits of the company and voting rights since it subscribed the securities

In order to exercise the option, the company must formulate it in special declaration of capital gains n°2074 :

Declaration of realised gains or losses

FYI  

the company may exercise this option up to 5 years after leaving the plan of the JEI provided that it meets the conditions.

Tax exemption on built properties

Municipalities and their public institutions for inter-communal cooperation (EPCI: titleContent) may, on deliberation, decide to exempt JEI-owned buildings from their full share.

To obtain the exemption, the company must register with the company tax department on which it depends:

Who shall I contact

This declaration must be signed before 1to January of the first year during which it may benefit from this exemption.

She lasts 7 years.

Exemption from company property tax

Municipalities and their public institutions for inter-communal cooperation (EPCI: titleContent) to own taxation may, on deliberation, decide to exempt JEIs created before 31 December 2022.

This exemption covers the share of the contribution that falls to each municipality or EPIC with its own taxation system.

She lasts 7 years.

The company must apply to the company tax department of which it notes:

The request is due on or before any of the following dates depending on the company's situation:

  • 2th next business dayto May of the previous year for which the exemption is requested
  • In case of establishment, change of operator or activity during the year: 2th next business dayto May of the following year of creation or change. You must file a draft return before 1to January of the year following the year of creation or change.
Is cumulation of exemptions possible?

A JEI that is exempt from income tax may also apply for the research tax credit (IRB).

However, it will not be able to benefit the exemptions and benefits granted to the following companies:

  • new company
  • Company created in urban free zone (ZFU)
  • Company in Rural Revitalisation Area (RBA)
  • Company created in a dynamic urban basin (BUD)
  • Company created in Priority Development Area (ZDP)

If the JEI qualifies for one of these exemption plans, the company will have to opt for the JEI regime. This option can be taken at any of the following times:

  • In 9 months after the start of its activity
  • In first 9 months of the fiscal year in which the election is exercised

This option is irrevocable.

An innovative young company before 1to January 2023 may benefit from an exemption from employers' social insurance contributions and family allowances.

This exemption applies to the share of remuneration less than€7,405.13 paid to:

  • Employees performing any of the following functions:
    • Engineer
    • Technician
    • R&D Project Manager
    • Industrial Protection and Project-Related Technology Agreements
    • Pre-Competitive Testing Staff
  • Social Agents which participate in the following main activities:
    • Company research and development project
    • Conducting prototype design operations or pilot installations of new products

For establishments created or deleted during the year, the annual limit of exempt contributions per establishment and per year shall be calculated in proportion to the elapsed time.

If, in any year, the company no longer meets any of the conditions required it loses the benefit of the exemption for the year under review.

It also loses it for subsequent years until it meets all the conditions.

To qualify for the exemption, the employer must be up to date with reporting and payment obligations of his social contributions.

No prior declaration with the Urssaf is necessary to obtain the exemption from social security contributions.

Company applies the exemption by completing contribution summary.

FYI  

the exemption applies within €205,680 by calendar year and by institution.

Young University company (GAME)

To be young university company, the company must meet the following conditions:

  • Be an SME: she employs less than 250 people and turnover less than€50 million or total balance less than€43 million
  • For social exemption : it has since been created under 8 years (the company definitively loses the status of JEI in the year of its 8th anniversary
  • For tax exemption : it has since been created under 11 years (the company definitively loses JEI status in the year of its 11thth anniversary
  • It must be directed or held at least10% by persons belonging to one of the following categories:
    • Student
    • Graduated less than 5 years of master's or doctoral degree
    • Persons engaged in teaching or research
  • She must have main activity the valorisation of research works in which the directors or associates have participated in a higher education institution (during their schooling or in the performance of their duties). A contract defining the conditions for recovery must have been concluded with that institution
  • Its capital must be held for 50% minimum by any of the following:
    • Physical
    • Other JEI held at least 50% by natural persons
    • Recognised public service scientific association or foundation
    • Public research and teaching institution or any of its subsidiaries
    • investment business
  • She was not created within the framework of concentrationrestructuring, extension or resumption of existing activities

A company who wishes to know whether she meets the requirements to be a young university company (JEU) can send to the tax authority request for opinion.

This request must be made taking into account the template next:

Template Request for Review GAME

It must be addressed by registered letter with acknowledgement or direct delivery to the Departmental Directorate of Public Finance on which the company depends:

Income Tax Exemption

A GAME can benefit from exemption from income tax equal to 100% when 1toprofit.

It can then benefit from a tax exemption on profits equal to 50% for next beneficiary year.

Warning  

this exemption applies only to fiscal years in which company meets the criteria to be GAME.

Exemption of capital gains from the sale of shares

A GAME is exempt from tax on capital gains from disposal of shares if it meets the following conditions:

  • She practised option to benefit from this exemption
  • Shares or shares have been subscribed after 31 December 2003
  • The assigned securities were retained for at least 3 years during which the company had PLAY status
  • The transferor of the securities, his or her spouse, ascendants or descendants did not hold more than 25% rights in the profits of the company and voting rights since it subscribed the securities

In order to exercise the option, the company must formulate it in special declaration of capital gains n°2074 :

Declaration of realised gains or losses

FYI  

the company may exercise this option up to 5 years after leaving the plan of the young innovative company once it meets the conditions.

Tax exemption on built properties

Municipalities and their public institutions for inter-communal cooperation (EPCI: titleContent) to own taxation may, on deliberation, decide to exempt from the full share of their share buildings belonging to the Games.

To obtain the exemption, the company must register with the company tax department on which it depends:

Who shall I contact

This declaration must be signed before 1to January of the first year during which it may benefit from this exemption.

She lasts 7 years.

Exemption from company property tax

Municipalities and their public institutions for inter-communal cooperation (EPCI: titleContent) to own taxation may, on deliberation, decide to exempt young innovative companies created before 31 December 2022.

This exemption covers the share of the contribution that falls to each municipality or EPIC with its own taxation system.

She lasts 7 years.

The company must apply to the company tax department of which it notes:

The request is due on or before any of the following dates depending on the company's situation:

  • 2th next business dayto May of the previous year for which the exemption is requested
  • In case of establishment, change of operator or activity during the year: 2th next business dayto May of the following year of creation or change. You must file a draft return before 1to January of the year following the year of creation or change
Is cumulation of exemptions possible?

A GAME that is exempt from income tax may also apply for the research tax credit (IRB).

However, it will not be able to benefit the exemptions and benefits granted to the following companies:

  • new company
  • Company created in urban free zone (ZFU)
  • Company in Rural Revitalisation Area (RBA)
  • Company created in a dynamic urban basin (BUD)
  • Company created in Priority Development Area (ZDP)

If the GAME meets the conditions to benefit from one of these exemption schemes, the company will have to opt for the GAME regime. This option can be taken at any of the following times:

  • In 9 months after the start of its activity
  • In first 9 months of the fiscal year in which the election is exercised

This option is irrevocable.

A game created before 1to January 2023 may benefit from an exemption from employers' social insurance contributions and family allowances.

This exemption applies to the share of remuneration less than€7,405.13 paid to:

  • Employees performing any of the following functions:
    • Engineer
    • Technician
    • R&D Project Manager
    • Industrial Protection and Project-Related Technology Agreements
    • Pre-Competitive Testing Staff
  • Social Agents which participate in the following main activities:
    • Company research and development project
    • Conducting prototype design operations or pilot installations of new products

For establishments created or deleted during the year, the annual limit of exempt contributions per establishment and per year shall be calculated in proportion to the elapsed time.

If, in any year, the company no longer meets any of the conditions required it loses the benefit of the exemption for the year under review.

It also loses it for subsequent years until it meets all the conditions.

To qualify for the exemption, the employer must be up to date with reporting and payment obligations of his social contributions.

No prior declaration with the Urssaf is necessary to obtain the exemption from social security contributions.

Company applies the exemption by completing contribution summary.

FYI  

the exemption applies within €205,680 by calendar year and by institution.

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