Subcontracting expenses
Legislative evolution - Finance law for 2021
The Finance Law for 2021 was promulgated on December 29, 2020 and makes adjustments to subcontracting expenses.
Article 35 removes, starting the 1er January 2022, the mechanism for doubling the base of research services entrusted to public or similar third parties which was introduced in 2004 with the aim of encouraging synergy between public research and private research.
The abolition of this doubling of the base would allow "a harmonization of the methods of taking into account expenditure relating to research operations entrusted to third-party organizations for the calculation of the research tax credit (CIR) by aligning the provisions relating to operations entrusted to public or similar bodies over those provided for private bodies ”.
This entails the abolition of the ceiling increased by 2 million euros at the rate of expenditure corresponding to operations entrusted to organizations. The ceiling of 10 million euros for research expenditure corresponding to entrusted operations continues.
Consequently, despite several actions and amendments voted in the Senate, a more flexible arrangement of this deletion has not been heard.
Source : Finance law for 2021
CIR approval
Legislative evolution - Finance law for 2021
The Finance Law for 2021 was promulgated on December 29, 2020 and provides details on the requests for rulings and expertise.
Thus, all requests for rescripts or expert opinions should be addressed exclusively to the ministry responsible for research. The law eliminates the possibility of sending such requests to bodies other than responsible for supporting innovation, such as the National Research Agency (ANR), which are no longer organized to deal with such requests.
Source : Finance law for 2021
Brexit: An agreement to the detriment of entrusted research
Following the signing of the Brexit agreement, the government came to modify its site on the consequences of the agreement. Thus, the government gives indications on the case of subcontracting to an approved British research organization.
It is then indicated that these expenses will no longer be eligible for the tax credit in favor of research.
Indeed, only subcontracting expenses incurred by public or private service providers established in France, in a Member State of the European Union or of the European Economic Area (EU, Norway and Iceland) can be taken into account in the base of the CIR. Research expenses entrusted by a French company to a subcontractor established in a third country do not enter the base of the CIR.
Source: The government portal on Brexit preparation
Innovation Tax Credit
Legislative evolution - Finance law for 2021
The Finance Law for 2021 was promulgated on December 29, 2020 and makes adjustments to the rate of tax credits for innovation spending in Corsica.
It is scheduled from 1er January 2020, an increased CII rate of 35 % for expenses incurred by medium-sized businesses and 40 % for expenses incurred by small businesses.
Source : Finance law for 2021
Case law: Restrictive assessment of the “new product” criterion
In a judgment of September 24, 2020, the Nantes Administrative Court of Appeal ruled on the cumulative conditions essential to assess the new character of a product within the framework of the innovation tax credit system.
In this case, a company had incurred innovation expenses as part of its computer programming activity. In 2015, this company thus carried out developments with the aim of inserting new functionalities into their software released in 2013.
The objective was to "bring together in a coherent whole all the functionalities available on the internet and presented separately in an intelligent whole" and that in terms of technical improvement, it is mentioned that "the developed solution must bring together in a unique tool all that is offered by the various players in this field in order to improve the sports practice of future users ”.
The Administrative Court of Appeal therefore recalled the two cumulative conditions for assessing the novelty of a product, which are that the product has not yet been made available on the market and that it differs from existing products. or previous by superior performance in terms of technology, ecodesign, ergonomics or its functionalities.
Thus, it was judged that the condition of novelty was not fulfilled on the grounds that, despite the recognition of the new character of the product when it was placed on the market in 2013, the improvement in 2015 by the development of several functionalities which are already offered on the market, there is no justification that these functionalities would be distinguished from other products by superior performance, even though no company, unlike the applicant company, offers all these functionalities in the same tool.
Source: CAA de Nantes, September 24, 2020, N ° 18NT03352