2017 Finance Act and 2016 Amended Finance Act: what measures in R&D?

You will find below new incentive measures adopted in the 2017 Finance Act, and the 2016 Amended Finance Act, enacted December 30th 2016.

Super depreciation measures extended

R&D and industrial investments can benefit from an exceptional extra depreciation equal to 40% of the original value of eligible assets (i.e. R&D and industrial materials and equipment) manufactured, bought or acquired through leasing or rental with a call option before April 15th 2017.

Eligible assets ordered before April 15th 2017 can benefit from this incentive under certain conditions (payment of a 10% deposit and acquisition within 2 years of the order).

The depreciation start date is the date of the acquisition of the asset.

Young innovative company status “JEI” (Jeune Entreprise Innovante) renewed for 3 years

Companies with a “JEI” status (new and independent SME with less than 8 years since creation and at least 15% of R&D expenditures) created before December 31st 2019 can benefit from:

  • CIT degressive exoneration over 2 years (100% the 1st profitable year, 50% the 2nd year) subject to certain limits
  • Land tax (taxe foncière) and contributions (CFE/ CVAE) exoneration (subject to communal deliberation) could be accorded on request for 7 years
  • Capped exoneration of employer’s social insurance contributions on R&D staff remuneration for 7 years (decreasing the employer’s total social charges from 50%/40% to 20%/15%)

PIA3 “Future’s Investment Programme” launched

The 3rd PIA investment programme is open with a total budget of 10 billion euros of which 4,1 billion euros will support company’s innovation and development.

For instance, actions that support companies’ modernization (priority to SME and collaborative projects) will mainly focus on:

  • Industrial procedures modernization (automatization, 3D print, internet of things)
  • Staff training actions
  • Collaborative innovative projects

The project calls will be competitive and should be presented in a collaborative framework. For a list of the selected topics, you can follow this link: PIA3 Gouvernement.fr. For the list of the project calls, you can follow this link: project calls.

The new improved tax credit on video games

Since January 1st 2017, companies that create original and certified video games can benefit from a tax credit raised from 20 to 30%, capped to 6 million euros per Fiscal Year, under certain conditions:

  • Development costs >100 000 euros per video game;
  • Intended to trade/commercialisation;
  • Created by French, EU staff or French residents.

The date of entry into force of the measure will be fixed by decree.

Lucille Chabanel

Lucille has more than 14 years’ experience in tax law. She is a member of the corporate tax department since 2002 and joined the R&D group in 2004. She has […]