Staff expenses: Remuneration of secondee’s staff qualifies for R&D tax credit in France

The remuneration of secondee’s staff can be included as staff expenses in the RTC basis of the host company, that qualify for R&D tax credit in France

The French tax administration was admitting the integration of secondee’s staff expenses in the R&D tax credit basis, under certain conditions.

However, the French administrative courts of appeal considered it was only an administrative tolerance, and that staff expenditures should be limited to the remuneration of the company’s hired staff. As a result they systematically rejected the integration of secondee’s staff expenditures in cases of tax credit reimbursement requests (CAA Paris, 05 February 2016, SAS Filiassur and CAA Versailles, 02 April 2015, SARL Intuigo).

The French Administrative Supreme Court decided otherwise, by considering that the payroll expenditures that qualify for R&D tax credit shall not be limited to the internal hired employees, and that they can also include secondee’s staff wages and social security contributions, payed by the host organization, given they are under its disposal, on its premises, realizing eligible research operations with its resources.

Hereby, the French Administrative Supreme Court confirms that staff expenditures qualified for tax credit are not limited to the hired internal staff of a company. 

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 […]

Annabelle Caron

With a background in political sciences and finance, Annabelle is specialised in Research Tax Credit in France and abroad, in the GI3 practice in Paris.