For the second year consecutively, the Finance Act has reduced the base of eligible expenses for the CIR.
Elimination of the doubling of the base for public research as of January 1, 2022
To date, the expenses incurred on R&D works entrusted to public entities may be double counted when calculating the R&D tax credit. 2021 Finance law abolishes this mechanism as of January 1, 2022.
Thus, the research expenses entrusted will be taken into account for their simple amount, the service provider will have to be certified, the ceiling of eligible expenses will be €10 million (€2 million in case of dependency between the contracting company and the service provider) and the expenditure entrusted shall be retained up to a limit of three times the amount of the other eligible research expenditure.
Higher CII rates for expenditures on Corsica’s territory
The R&D expenses incurred in Corsica will be eligible to the innovation tax credit with an improved rate of 35% for medium-sized companies and 40% for VSBs. This measure comes into force on January 1, 2021.
Until now it was possible to ask for a RTC ruling to the French tax administration (LPF, art. L80 B 3°) and both to the Ministry of Research and to organizations responsible for supporting innovation (LPF, art L 80 B, 3° bis). As of January 1, 2021, the requests will be sent only to the FTA or to the Ministry of Research.