New case law on the CIR eligibility of sub-projects linked to the inseparability of works

The decision of the CAA of Toulouse 1st chamber, 25/04/2024, deals with the indivisibility of work carried out within different sub-projects whose eligibility for the research tax credit has been admitted.

Kaliop Group, which provides digital solutions for multi-content management in the field of digital communication, has applied for a CIR corresponding to the expenses incurred in connection with a project to develop a digital content management system.a joint project with its subsidiaries entitled "Développement expérimental d'un outil générique d'aide à la création d'applications multi-protocoles". After partial admission, she claims full refund of tax credit.

In this case, the company maintains that the work carried out under two sub-projects are indissociable from other sub-projects whose eligibility for the CIR has been acceptedThe aim is to enable communication between the tool in place and a multitude of platforms, through fluid and precise exchanges, without loss of information or saturation effects.

This work will resolve the problem of the tool's complex environment identified in one of the eligible sub-projects.

The expert from the regional research and technology delegation noted in its report that the work carried out as part of the disputed sub-projects consisted of performance testing and technical adaptation of the solution implemented, however, it confined itself to analyzing the eligibility of the four sub-projects in isolation, without expressing an opinion on whether the work carried out under the various sub-projects is indissociable, or whether the work is necessary for the other projects for which the qualification of experimental development has been recognized.

Despite the inadequacies in the documentation initially submitted by the company had led the expert, on his own initiative, to divide the project into four distinct sub-projects, the project presented by the company was nevertheless presented as a single project based on four lines of thought.

The Court considered that, in view of the company's precise and detailed explanations of the interactions between the four sub-projects and the absence of an expert opinion on the eligibility of the two sub-projects at issue because of their necessity for the experimental development operations carried out by the company, the state of the file makes it impossible to assess eligibility for the research tax credit expenditure on work carried out under these sub-projects. The court therefore ordered an expert appraisal on this point.

Analysis by our tax experts concerning the indissociability of work carried out as part of a single research operation declared for the CIR.

In this case, it was the inadequacies of the dossier initially submitted by the company that led the expert to proceed, on his own initiative, with a division into four distinct sub-projects, although the project presented by the company was presented as a single project based on four lines of thought.

For example, in the case of a research project submitted to the CIR and grouping together several sub-projects, it is necessary to provide the following information sufficient initial justification allowing the tax authorities or a MESR expert to rule on the eligibility of all work carried out with regard to CIR criteria.

The strategy of presenting several lines of thought in a single operation should be considered on a case-by-case basis. This decision must be sufficiently justified and developed in writing in technical documentation, particularly in the case of joint projects with subsidiaries. The consultant in charge of your file will be able to advise you on the best declaratory strategy for your situation!

Do you have a question about the CIR eligibility of your projects?

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