On January 15, 2025, the Senate began examining the second part of the Finance Bill (PLF) for 2025. This key text for the French economy is structured around concrete measures to promoteinnovationbusiness competitiveness and ecological transition.
Background to PLF 2025
Last December, parliamentary work was interrupted by the government's censure of the vote on the Social Security Financing Bill (PLFSS). Despite this setback, the PLF 2025 is moving forward with ambitious guidelines for the future.
What measures have already been adopted?
As a reminder, during the Senate's examination of the first part of the PLF 2025, provisions were adopted on December 4, 2024:
Proposal forIP Box :
- Maintaining a reduced rate of 10% for the taxation of income from certain industrial property assets.
Clarifications and adjustments proposed for the Research tax credit (CIR) :
- Elimination of technology watch expenses and revision of operating expense ratesnow set at 40 % instead of 43%.
- Modification of the capping assessment method expenses eligible for 30% CIR to 100 million euros. The amount will be assessed at the level of the parent company (group) and no longer at the level of the reporting company alone. The same method will be applied to the 5% rate for expenditure in excess of 100 million euros.
- Patent expenses maintained (deletion initially planned by the Senate Finance Committee).
- Continued spending on standardization (deletion initially planned by the Senate Finance Committee).
Specific devices: JD, CII and CIC :
- Young doctor scheme maintained (deletion initially planned by the Senate Finance Committee).
- Three-year extension for Innovation Tax Credit (CII) (until 2027) and reduced the rate to 20%.
- Proposed 3-year extension for the Collection Tax Credit (CIC) to support activities in the textile sector.
Companies with production units outside the EU :
- "Companies that do not have an institutional unit resident on the territory of a member state of the European Union" will benefit from the CIR at a reduced rate of 20% (vs. 30%) for expenditure under €100m, and 2.5% above that. The Senators point out that the aim of the amendment is to reduce the CIR rate for companies that do not have a production unit in a European Union member state.
Tax framework for the notion of public subsidies within the CIR framework :
- should be considered as a public subsidyThis is a form of aid paid by a public or private legal entity entrusted with a public service mission.
The government gives its opinion in advance of the debates. What are the tax guidelines for 2025?
On December 31, 2024, the government unveiled the positions it will defend in the next Finance Act for 2025. These tax measures are designed to respond to today's major economic and social challenges. In particular, two innovation tax measures are targeted:
- Innovation tax credit (CII):
- Scheduled renewal from January 1, 2025.
- Modification : The aid rate would be reduced from 30% to 20%.
- Collection tax credit (CIC):
- Scheduled renewal for three years from January 1, 2025.
There is also talk ofapply the "OECD Pillar 2: the Government intends to incorporate the OECD's guidelines for theminimum taxation of multinationals' profits.
The tax measures for 2025 aim to supporting innovation by renewing several key schemes. However, certain modifications, such as the reduction in the CII rate, reflect the the need to reconcile support for innovation with budgetary constraints.
Would you like to find out more about the latest developments in these tax incentives for innovation in France?
Ask our tax experts
Discover our support dedicated to securing your tax credit (CIR, CII, CICo, C3IV)
or your application for JEI status
Newsletter
Receive all our expert news by e-mail.
Subscribe to our newsletter.
