CIR Jurisprudences: subcontracting expenses

Case law - Cancellation of the restrictive doctrine of April 4, 2014 regarding subcontracting 

The Council of State annulled the administrative doctrine below found in the second paragraph of paragraph 220 of BOI-BIC-RICI-10-10-20-30 dated April 4, 2014, as well as its quantified example.

“The approved organization must then deduct from the basis for calculating its own research tax credit the sums received from organizations for which the research operations are carried out and invoiced (CGI, art. 244 quater B, III). The purpose of this provision is to prevent the same research operations from giving rise to the right to the tax credit twice.


Company A orders a specific research operation from an approved body B. In consideration for the service provided, A pays B the sum of € 10,000.

Company A will take into account the sum of € 10,000 in the basis for calculating its tax credit.

In return, organization B will deduct the same amount of € 10,000 from the basis for calculating its own tax credit. "

This doctrine had the effect of obliging approved private research organizations subcontracting to include in the basis of their Research Tax Credit (CIR) the amount of eligible expenses incurred in the context of research operations carried out on behalf of eligible third parties, before deduce the amount of the invoicing sent to its principal.

The Council of State annulled this doctrine, ruling that the provisions of article 244 quater b of the CGI must be interpreted as prohibiting approved private research organizations from including in the basis for calculating their own research tax credit the expenses incurred to carry out research operations on behalf of third parties.

Thus, approved private research organizations carrying out research expenses on behalf of a third party do not have to include the amount of expenses incurred in the base of their CIR and to deduct therefrom the total amount of the sums invoiced in remuneration of these benefits.

An approved subcontractor can therefore now do without re-invoiced projects and only declare transactions carried out for its own account in order to benefit from the same advantages in terms of CIR as a non-approved organization on its internal projects.


Source: CE, September 9, 2020, 440523

Case law - First feedback on the application of the Council of State's position in terms of valuing the subcontracting services necessary for carrying out research operations


In a judgment of August 5, 2020, the Strasbourg Administrative Court considered that subcontracting expenses essential to the completion of research projects carried out by the principal could be considered eligible at the latter even though they were did not in themselves correspond to real clearly individualized research and development operations.

This therefore reinforces the declarants in their legitimacy to follow this approach as part of their declaration.


Source : TA de Strasbourg, 5 August 2020, 1807359


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