What is the Research Tax Credit?

The Research Tax Credit (CIR) is a tax incentive designed to support businesses in financing their R&D expenses.

Only activities related to fundamental research, applied research, and experimental development are eligible for CIR.

To qualify as eligible, an R&D activity must meet the five cumulative criteria established by the Frascati Manual:

• Novelty
• Creativity
• Uncertainty
• Reproducibility
• Systematic approach

Which Companies Can Benefit?

Eligible companies are those that:

• Engage in industrial, commercial, or agricultural activities
• Are subject to a real taxation regime
  Non-profit organizations may also benefit from CIR, provided that their R&D activities fall within their taxable (commercial) operations.

Which Expenses Are Eligible?

Eligible expenses must:

• Impact the company’s taxable income
• Be incurred during the calendar year
• Relate to work conducted in France, the European Union, or the European Economic Area (except for expenses related to industrial property or technological monitoring)

The CIR covers a wide range of eligible expenses, including:

• Personnel costs related to R&D
• Depreciation allowances
• Operating expenses
• Outsourced R&D services from approved providers
• Beyond these eligible expenses, adjustments must be made to the CIR base.

These adjustments account for:

• Grants and subsidies
• Repayable advances
• Zero-interest innovation loans
• Contracts between the declaring company and its consultants.

What Is the CIR Rate?

The Research Tax Credit (CIR) rate is set at 30% for eligible expenses incurred in mainland France. For expenses exceeding €100 million, the rate is reduced to 5%. However, for R&D activities carried out in French overseas territories, the rate is increased to 50%.