Find out in this article how the public grants you receive for your research, development and innovation projects can be combined with your CIR or CII tax credit.
Public funding: subsidies, repayable advances, what are we talking about?
There are many public grants and subsidies available within the European Union, national territory and regionsoften little-known. These aids and subsidies are real opportunities for financial support at every stage of your R&D and innovation projects (investment, prototype development, international expansion, etc.). They can be granted in the form of grants and repayable or recoverable advances as the project progresses.
It is not uncommon for innovative companies integrate public funding into their overall strategyto complement their R&D and innovation strategy.
However, thisome organizations are reluctant to combine these two types of financing for fear of impacting their tax credit (CIR / CII).
How does this public aid affect the calculation of your CIR / CII?
The application rules state that " when calculating the CIR / CII, the company must deduct from its tax credit base any subsidies received to finance expenditure included in the CIR / CII base. ".
However, it has been mathematically proven that the combination of the two systems considerably increases the base of expenditure financed by public aid.
Combining the CIR / CII and public aid: what is the financial benefit for your company?
In reality, if your project budget is estimated at 100 and financed solely by the tax credit (CIR or CII), your company will be able to recover 30 (application of 30% of CIR or CII). If the same project is first financed by a grant of 40%, it can then be financed by the CIR or CII on the remaining part (30% of 60). In this example, your project budgeted at 100 would therefore be financed to the tune of 58% by combining the 2 schemes, and not 30% with the tax credit alone.
| Project supported by CIR/CII only (Budget 100) | Project supported by the CIR/CII and a grant of 40% (Budget 100) |
Funded by a grant of 40% | – | 40 |
CIR / CII financing (30%) | 30 | 30% x 60 = 18 |
Financing obtained | 30 | 58 |
It's important to remember that to secure your tax credit, a supporting documentation must be compiled to prove compliance with eligibility criteria. Even if obtaining a subsidy can be an important Important indicator: this does not necessarily guarantee that the project is strictly eligible for the CIR / CII.. However, this often lends credibility to the disruptive nature of the project.
Article written by
Axel MERLIN
Innovation Business Manager at G.A.C. Group
Are you unsure whether your project is eligible for the CIR/CIR?
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