CIR in figures
According to figures released by the Ministry of Higher Education and Research, during 2014, 24,300 companies declared expenditure eligible for the tax credit. The total amount of aid granted by the State to these companies came to €5.9 billion. Of the research expenditure declared, 3% is attributed to patent-related expenditure. In comparison, spending on personnel, researchers and technicians accounted for 49% of all declarations.
Did you know? Your patent is an eligible expense for the CIR!
As soon as your project has been defined as eligible for the research tax credit, the costs of filing and maintaining your patent, or even amortizing it, are eligible for the research tax credit. For a start-up, or any innovative company, this means that it is possible to benefit from public aid not only for the discovery of inventions and the creation of prototypes, but also for the protection of its rights. Indeed, industrial property rules are very clear on this subject. Only the natural or legal person holding the patent has the right to prohibit a third party from exploiting its invention. It’s a title that grants a monopoly! Consequently, from the moment a company is innovative, it makes sense to implement procedures to protect its inventions. The CIR helps finance innovation, but also the protection of inventions.
Definition of the CIR
The CIR, or Créditd’Impôt Recherche, is a tax scheme designed to support companies in their research and development work. This includes applied research, fundamental research and experimental development. It takes the form of a deduction from the tax due for the current year, and during the year in which the research was carried out. For companies subject toincome tax , the deduction applies to taxes on industrial and commercial profits. For companies subject tocorporation tax(IS), the deduction applies to actual profits (normal or simplified).
Am I eligible for the CIR?
The CIR is only available to companies.
To be eligible for the CIR, precise criteria must be met. These include defining the innovative nature of the project. The invention created must be original, and in the case of an existing process, show a radical improvement.
It’s important to realize that the patent procedure alone does not guarantee the innovative nature of R&D work.
What is the tax deduction rate allowed by the Research Tax Credit?
Up to €100 million, the rate of the CIR claim is 30% of eligible expenditure. Beyond the first €100 million, the rate is reduced to 5%. Please note that as of January1, 2015, eligible expenditure incurred in an overseas department is eligible for a 5% CIR rate, even below the €100 million threshold.
When the amount of the CIR exceeds the tax due
Given that the CIR is a tax credit on R&D expenditure, it may exceed the tax liability. In this case, the balance of the deduction is deducted from the company’s tax liability over the following 3 years. The amount of funding obtained through the Research Tax Credit is therefore never lost! The same procedure applies to loss-making companies. At the end of the 3 years, the amount can be refunded if necessary.
Request for immediate repayment of the CIR
SMEs, start-ups, companies undergoing conciliation, safeguard, receivership or liquidation proceedings, and young innovative companies can apply for immediate repayment of the tax credit.
Budgeting CIR-eligible expenditure
In order to draw up the most representative business plan possible, it is essential to estimate the costs of your R&D. As far as invention protection is concerned, you can now easily find out the cost of patent registration and maintenance. Thanks to YesMyPatent, the cost of patenting is entirely transparent, from thepatentability study phase, to the drafting of the patent by an expert (patent attorney), and the granting procedures right through to obtaining title.
YesMyPatent’s fees are eligible for the Research Tax Credit.
Expenses to be declared for the CIR
Since 2013, the total amount of eligible expenditure declared for the CIR appears to have stabilized. However, these figures do not give an accurate picture of the costs that companies are actually likely to incur to finance their R&D. Undoubtedly, many companies do not take advantage of this tax incentive for lack of information. So here’s a summary of the expenses for which you may or may not be able to claim a research tax credit.
| Eligible | Not eligible |
| – R&D operations entrusted to external service providers (located in France, the EU or the EEA) – Amortization of patents or VOCs acquired to carry out R&D operations – Patent and VOC filing and maintenance costs, wherever incurred – Patent and VOC defense costs – Patent and VOC insurance costs (up to 60,000 euros per year) | – Design and trademark fees – Licensing fees |
The declaration is made directly to the Service des Impôts des Entreprises (SIE), and to the Direction Générale pour la Recherche et l’Innovation (DGRI) of the Ministère de l’Enseignement Supérieur et de la Recherche. This application (Form 2069-A-SD) must also be attached to the company’s annual income tax return, filed at the end of the fiscal year.
