France: SMEs to benefit from innovation tax credit

17 February 2014

The Finance Act for 2013 n°2012-1509, dated December 29th, 2012, allows communautary SMEs (PME) (having less than 250 employees, a turnover of less than €50M and total balance sheet of less than €43M) to benefit from a new tax credit on innovation expenses.

The eligible projects are:

  • Operations concerning conception of prototypes of new products that have not already been launched in the marketplace, nor commercialized;
  • Operations concerning pilot installations of new products that have not already been launched in the marketplace, nor commercialized.

The eligible expenses to the new provisions are capped up to €400 000 per year and the tax credit rate calculated for these expenses is fixed at 20%, thus representing a  total amount of  €80 000 per year. This amount should be charged on corporate tax (impôt sur les sociétés) or refundable within 6 months.

For the first tax credit on 2013 expenses, a specific form should be filled at the date of the roll deposit (i.e. beginning of May 2014 for a fiscal year ending December 31th 2013).

Our assistance focuses on:

  • calculating the innovation tax credit ;
  • preparing the eligible expenses documentation ;
  • carrying out tax formalities that have to be performed in early May 2014.

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