France: Tax-Efficient Sectors
Scientific & Technical Research
This page was last updated on 15 Nov 2018.
Until 2003, certain expenditure directly and indirectly related to research and development was subject to a tax investment credit. This totalled 50% of the amount by which the research expenditure exceeded the research expenditure in the previous years after taking into account the average rate of inflation (calculated biannually).
From 2004, a new system of research and development (R&D) tax credits was put in place. Credits are based on 5% of total expenses and 45% of the increase in expense over the previous period, up to a ceiling of €8m.
Currently, the tax credit for R&D amounts to 30% of eligible R&D expenses incurred during the present calendar year for the first €100 million in eligible expenses and 5% beyond that.
R&D subcontracted to public research organizations receive a double tax credit. The scheme takes operating costs into account by retaining 50% of the R&D staff costs plus 75% of the depreciation on the assets that were allocated to the research.