Are public subsidies or subsidies taxable?

Yes, public aid and grants (operating or operating, equipment or investment, material or personal contributions) are taxable.

They are a product that is included in the company's taxable income.

This revenue shall be linked to the financial year in which the public aid becomes an acquired debt. The proceeds become an accrued receivable when it is certain that they exist and that they amount at the time of the financial year under consideration.

If state aid and grants have to be repaid by the company, then they will not be taxable.

Certain direct or indirect investment or equipment subsidies (reduction of the sale price of the investment) may be on option imposed on a staggered basis.

The option is irrevocable

It is open to income tax companies in the category BIC: titleContent or NBC: titleContent in some cases and businesses subject to business tax.

It shall apply to the following aid:

• Public aid and subsidies granted by any European or French public body and by approved professional associations (for example, subsidies granted by a municipality for the purchase of low-emission buses)
• Aid and grant for the creation, acquisition or leasing of specified capital goods (or certain works).

The option may be exercised for each immobilization and differs according to the nature of each one.

In the case of depreciable fixed assets (vehicle, building, etc.), that is to say assets which may lose value, an extension is made over the depreciation period of the asset. This staggering is done from the year of the first amortization period, regardless of the grant award date.

If the investment is financed by leasing, the grant granted to the lessee shall in principle be paid back in fractions equal to the result of the financial years ended during the period covered by the contract.

In the case of non-depreciable property (e.g. land), which does not lose value, the results of the years during which the property cannot be disposed of (inalienable) shall be broken down into equal fractions. If there is no clause preventing the property from being disposed of at any time, the staggering is done over a period of 10 fiscal years from the fiscal year following that of its assignment.

The option is called into question if the subsidized fixed asset is disposed of or the lease financing contract is terminated before the end of the spreading period.

The accounting treatment is different from the tax treatment because it provides for an averaging of the grant from the accounting year in which the grant was awarded.