What is Research Tax Credit (CIR)?
The Research Tax Credit (CIR) is a French tax incentive designed to encourage businesses to invest in research and development (R&D) activities. It is a refundable tax credit that can be applied to corporate income tax or carried forward for up to five years.
Eligibility
To be eligible for the CIR, businesses must meet the following criteria:
- Be subject to corporate income tax (IS) or corporation tax (IR)
- Carry out R&D activities in France
- Have a minimum annual R&D expenditure of €100,000 (excluding subcontracting expenses) over a three-year period
- Meet certain criteria related to the nature and scope of the R&D activities
R&D Activities Covered
The CIR applies to a wide range of R&D activities, including:
- Fundamental research
- Applied research
- Experimental development
- Feasibility studies
- Design studies
Tax Credit Calculation
The amount of the CIR is calculated as a percentage of eligible R&D expenses:
- 30% for incremental R&D expenditures (compared to the previous three years)
- 50% for research activities carried out by young innovative companies (JIEs)
Claiming the CIR
To claim the CIR, businesses must file a special tax return (Form 2069 RCI) with the French tax authorities. The return must include detailed information about the R&D activities carried out and the related expenses.
Benefits of the CIR
The CIR provides several benefits for businesses, including:
- Reduced R&D costs
- Increased cash flow
- Improved competitiveness
- Enhanced innovation capabilities
Recent Changes to the CIR
In recent years, several changes have been made to the CIR to improve its effectiveness and impact:
- Increased Flexibility: The CIR is now more flexible in terms of the types of R&D activities that are eligible and the calculation of the tax credit.
- Simplified Administration: The administrative process for claiming the CIR has been simplified to reduce the burden on businesses.
- Enhanced Support for Young Innovative Companies: JIEs are now eligible for a higher tax credit rate (50%) to support their R&D efforts.
Conclusion
The CIR is a valuable tax incentive that can help French businesses invest in R&D activities and enhance their innovation capabilities. By providing financial support and reducing R&D costs, the CIR encourages businesses to innovate and drive economic growth.
Qu’est-ce que le crédit d’impôt recherche (CIR) ?
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economie.gouv.fr a new article on 2024-10-28 15:07 titled “Qu’est-ce que le crédit d’impôt recherche (CIR) ?”. Please write a detailed article on this news item, including any relevant information. Answers should be in English.
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