The Toulouse Administrative Court of Appeal recognizes the eligibility for the CII of work on subsequent versions of software already on the market, subject to specific conditions.
CII jurisprudence - Software: the key points of the Equadex ruling (CAA Toulouse, April 10, 2025)
The Toulouse Administrative Court of Appeal (CAA) has handed down an important decision on the subject of Innovation Tax Credit (CII) recognizes that the development of new versions of a software already on the market may be eligible for the CII, if their innovative nature is objectively demonstrated.
Software already on the market... but still innovative?
In this case (CAA Toulouse, 1st ch., April 10, 2025, no. 23TL00138), the company SAS Equadexspecializing in software solutions, had declared the following amounts under the 2013 and 2014 ITCs prototyping of major new software versionsThe first version was launched in January 2013.
The tax authorities had questioned the eligibility of these expenses, considering that they were merely simple functional updatesIn her view, this excluded the notion of prototyping a new product.
A position overturned by the Toulouse CAA
The Court disavowed the administration on several points that are essential for software developers:
- The previous marketing of a first version does not preclude subsequent versions from being considered as new productsif they meet the innovation criteria required by the CII.
- The fact that some developments come from customer requests or are billed does not, in itself, call into question the concept of noveltyprovided that equivalent functionalities are not already offered by competitors.
- The company was able to demonstrate that successive versions met the needs of its customers. separate design and prototyping stageswith pilot plants and that each version featured a different objective, measurable superioritycompared with both previous versions and the current market offering.
A strong signal for software publishers
This ruling clarify the doctrine on the application of the ITC to software. It confirms that a software product can continue to be innovative after its initial market launch, if the company can demonstrate differentiation, novelty and added value.
He also stresses the importance of document each prototyping phaseof monitor market trends and of justify functional and technical advances compared with the competition.
Source :
Do you have any doubts about your eligibility for the CII?
Ask our tax experts
Newsletter
Receive all our expert news by e-mail.
Subscribe to our newsletter.
Discover our support dedicated to securing your tax credit (CIR, CII, CICo, C3IV)
or your application for JEI status
