Why the tax authorities refused Cleyrop's CIR refund
Cleyrop requested reimbursement of a research tax credit (CIR) for 2022. At the end of the investigation, the tax authorities took the view that all the sums paid by Bpifrance constituted public subsidies that had to be deducted from the basis for calculating the CIR, leading to the rejection of the refund request.
The company contested this position, arguing that Bpifrance, incorporated as a société anonyme, could not be considered as a legal entity governed by public law within the meaning of Article III of Article 244 quater B of the French General Tax Code.
Paris Administrative Court rejects the notion of a public subsidy
The Paris Administrative Court rejected the administration's analysis. It points out that, for the application of III of article 244 quater B of the CGI, only aid paid by a legal entity governed by public law can be qualified as public subsidies that must be deducted from the tax base. CIR.
Noting that Bpifrance is a public limited company, the court ruled that the sums it pays do not constitute public subsidies within the meaning of the text applicable to the dispute, and that they should therefore not be deducted from the basis for calculating the tax credit. It therefore orders the refund of the CIR claimed..
Finance Act 2025: changes to the rules for deducting public aid from the CIR
The scope of this decision must be assessed in the light of changes in the legislative framework. In fact, article 58 of law no. 2025-127 of February 14, 2025 of finances for 2025 a specified that public subsidies to be deducted from the CIR base now include aid paid by legal entities governed by public law or by legal entities governed by private law entrusted with a public service mission.
These new provisions apply to research expenses incurred after February 15, 2025. As a result, the solution adopted by the Paris Administrative Court is operational only for aid received in respect of expenses incurred prior to this date, which does not limit its practical value in view of the number of audits and disputes still in progress concerning previous financial years.
Bpifrance aid and CIR: what strategies to adopt in the face of tax audits?
This decision comes against a backdrop in which the tax authorities have long adopted an expansive interpretation of the notion of "taxable income". public subsidy.
Even before the Finance Act for 2025 came into force, the French tax authorities took the view that aid paid by Bpifrance should be deducted from the research tax credit base, a position it has formalized in its doctrine. It specifies in particular that «innovation zero-rate loans (PTZI) distributed by Bpifrance, by virtue of their characteristics, are assimilated to public financing of research projects».» and must therefore be taken into account in the basis for calculating the CIR in the same way as reimbursable subsidies.
However, by adopting a strictly organic interpretation of the notion of public subsidy, based on the status of the granting body as a legal entity governed by public law, the Paris Administrative Court validates the possibility of contesting reassessments based exclusively on the qualification of Bpifrance aid.
It should be stressed, however, that this decision was taken by a court of first instance and does not prejudge the position that may be adopted by higher courts, in particular the Conseil d'Etat.
In this context, while the deduction of Bpifrance grants remains the safest option in practice, in the absence of litigation, the decision of the Paris Administrative Court reinforces the importance of considering the deduction of Bpifrance grants for financial years prior to 2025, an assertive litigation strategy, based on case-by-case analysis and rigorous documentation.
We will be sure to keep you informed of any developments in case law and legal doctrine that may clarify or invalidate this position.
Securing your innovation tax strategy
Against a backdrop of tighter controls and regularly changing tax rules, securing innovation tax systems is a major challenge for finance and tax departments.
G.A.C. Group assists innovative companies in analyzing the tax risks associated with the CIR, securing calculation and declaration methods, managing audits and disputes, and documenting and justifying research expenditure.
FAQ - CIR and Bpifrance grants
Should Bpifrance grants be deducted from the CIR?
For expenses incurred after February 15, 2025, certain public service grants must be deducted. For earlier years, the question can be discussed depending on the situation.
Is it possible to contest an adjustment linked to Bpifrance aid?
Yes, particularly for years prior to 2025, subject to precise analysis and solid documentation.
