On February 3, 2025, French Prime Minister François Bayrou used Article 49.3 of the French Constitution to commit his government to passing the Finance Bill for 2025. The motion of censure, debated on February 5, was rejected, resulting in adoption of the text.
The promulgation decree was published in the Journal Officiel on February 14, 2025, making it applicable for the year 2025.
In this article, discover the impact of this bill on all tax incentives for R&D and innovation in France from 2025 onwards.
Key points from the BAYROU government's text on tax incentives for innovation
Important changes to the Research Tax Credit (CIR) :
- Young Doctor" status abolished The tax benefits linked to the hiring of young PhDs (doubling of personnel costs) will no longer apply under the CIR.
- Expenditure on patents and plant breeders' rights (COV) no longer taken into account Costs associated with taking out, maintaining and defending patents and plant breeders' rights will no longer be eligible for the CIR.
- Elimination of amortization of patents and trademarks These allocations will no longer be taken into account when calculating the CIR.
- Elimination of technology watch expenses Expenses incurred for technology watch (initially capped at €60k/year) will no longer be eligible for the CIR.
- Modification of the definition of public subsidy within the CIR framework Public subsidies are now understood as "... aid paid by legal entities under public law or by legal entities under private law entrusted with a public service mission ".
- Reduction in personnel-related operating costs to 40 % The rate applicable to personnel expenses will be reduced from 43 % to 40 %.
Important for your calculation : The law stipulated that this change had to be taken into account the day after the law was promulgated, i.e. February 15, 2025. As a result, you will need to take these changes into account when valuing your 2025 CIR as of 15/02. Expenditure incurred previously remains subject to the rules applicable to the 2024 CIR.
What are the changes to CII, CIC, CIJV and IP Box?
- The Innovation Tax Credit (CII) extended until 2027, with a reduced rate of 20% : Initially threatened with abolition, the CII will be maintained until 2027, but with a lower rate of 20%.
- The Collection Tax Credit will continue unchanged until 2027: The companies concerned will be able to continue to benefit from this tax credit without any change to the current conditions.
- The Video Games Tax Credit will remain unchanged until 2031: The companies concerned will be able to continue to benefit from this tax credit without any change to the current conditions.
- The device IP Box is unchanged: The favourable tax regime for income from intellectual property will remain unchanged and will continue to apply under the same conditions.
Important for your calculation : the provisions relating to CII, CIC, CIJV will be applicable from 1er January 2025.
What about Jeunes Entreprises Innovantes (JEI) status?
On the other hand, the status of Young Innovative Companies is not part of the Finance Bill, but of the Social Security Financing Bill (PLFSS), which was definitively adopted by the Senate on February 17, 2025. The Social Security Financing Bill was officially published in the Journal Officiel on February 28, 2025, and comes into force on March 1, 2025.
Until February 28, 2025, a company had to devote at least 15 % of its expenses to research and development (R&D) to qualify for JEI status. Now, from 1er March 2025, the minimum R&D expenditure to qualify for JEI status increased from 15 % to 20 %.
As a result, the number of eligible companies has fallen.
Important : This new threshold will apply to all companies from 1er March 2025.
These significant changes need to be taken into account in your tax and financing strategy for your innovation in particular to control your cash flow over the coming years. Think about national public funding and European to boost your cashflow!
Would you like to find out more about the latest developments in these tax incentives for innovation in France?
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