A measure in favor of research and development activities (R&D)
The RTC is annual, regardless of the date on which the financial year ends
The RTC rate is :
- 30 % on research expenses not exceeding 100 million euros (or 50% in oversea departments)
- 5 % on research expenses exceeding 100 million euros
Purpose of the RTC :
- Deductible from the income tax
- The excess tax credit is carried on the next 3 years. After this period, the amount of tax credit that has not been used may be reimbursed
- An immediate refund is possible under certain conditions
Expenses eligible for the RTC :
- Research operations within the European Economic Area included in taxable incomes
The following expenses are taken into account by the RTC :
- Tax deductible depreciation related to R&D fixed assets, directly used for the research operations ;
- Tax deductible depreciation related to patents ;
- Wages of the R&D staff involved in the research activity ;
- Operating expenses fixed to 50% of the gross salaries and 75% of tax deductible depreciation above mentioned ;
- Subcontracted R&D ;
- Patent expenses related to registration, updating and any litigation cost ;
- Technological survey expenses.
Ruling request :
The company may submit a request to French Tax Administration to confirm the eligibility of it’s expenses.
The ruling request must be made 6 months before the RTC compliance.
The answer must be given within 3 months, otherwise the tax ruling is deemed granted.
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