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Innovation Tax Credit (ITC)

Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)

The Innovation Tax Credit (ITC) is an extension of the Research Tax Credit (IRB) that applies to expenditures made up to December 31, 2022 related to prototypes and pilot facilities for new products. The CII is reserved for SMEs. The declaration is made using the same form and the same procedure as for the CIR.

The ICD may be applied to projects for prototype design, prototype development or pilot installation of a new product.

However, the prototype or pilot installation must meet the following 2 conditions:

  • It must have superior technical performance
  • It must present features, ergonomics or eco-design in relation to the products marketed by competitors at the start date of the work.


only the technology part of a service innovation may be eligible for ITC.

The expenses eligible for the ITC are:

  • Prototype design costs
  • Prototype construction costs
  • New Product Pilot Installation Expense

These expenses may be internal or due to subcontracting.

Expenditures for the prototype or pilot phase of the new product are not covered by the ITC.

In mainland

The ITC rate corresponds to 30% of the expenses incurred in the project.

The amount of the credit is limited to €120,000 per year.

The expenditure incurred shall be capped at €400 000 per year.

In an overseas department

The ITC rate corresponds to 60% of the expenses incurred in the project.

The amount of the credit is limited to €240,000 per year.

The expenditure incurred shall be capped at €400 000 per year.


Expenses can be internal or subcontracted.

The rate is 35% for project expenditures for accounting years ended 31 December 2019. Otherwise, it is 20%.

The amount of innovation expenditure shall be capped at €400 000 per year.

Where and how do I apply for a licence?In order to determine whether a project is eligible for the ITC, the company must follow the rescript procedure.

With the rescript, the administration takes a formal position.

The rescript ensures that the project will have access to the ITC and that no different assessments can be made during a subsequent tax audit.

The actual situation must be the same as described in order for the positive outcome to be achieved.

The company can request as many resources as it wishes to ensure maximum security of its expenses over time.

The tax authority may request an expertise of the work presented before responding to the company. The tax authority must reply within 3 months of receipt of the complete file or the opinion is considered favourable.

The application for a licence must be filed no later than 6 months before the deadline for filing the CIR-CII declaration.

It must be sent by registered letter with acknowledgement of receipt to the company Tax Service (EIS) to which the company is attached in order to make its tax returns.

Who shall I contact

If the opinion of the tax administration is unfavourable, the company has 2 possibilities:

  • Either she asks for a second opinion within 2 months. The tax authority will have to respond within 3 months after consulting an ad hoc committee.
  • Either she overrides the administration's advice and uses the reasons for the rejection to modify her plan in order to make it eligible. It can then re-apply for a rescript on this modified project.


if the company decides to ignore the opinion of the tax authority and not to modify its draft, it runs the risk of being corrected in case of control.

It must be filed at the same time as the Special Declaration on the CIR.

This declaration must be made in paragraph IV of the 2069-A-SD return form.

  • If the company is subject to business tax, it must file the form cerfa n°11081 with the tax department by April 15, at the same time as the balance sheet.
  • If the company is subject to income tax, it must file the form cerfa no. 11081 with the tax department no later than the 2nd business day following the 1to May.

Research Tax Credit


ITC returns may be subject to tax control.

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