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France supports start-ups and their

Taxation

2020 / MARCH 10

France offers innovative SMEs tax, social and financial support in an economic environment that is one of the best in the world. Indeed, at all times and regardless of the government in place, favourable mechanisms for innovative companies are subject to consensus within French economic policy.

These mechanisms, which benefit companies carrying out research, development and innovation work, are on three levels:

  • tax incentives: mainly through research tax relief (CIR) and innovation tax relief, and, for new companies, total and partial exemptions from taxes (corporation tax, local taxes);
  • social incentives: thanks to the status of new innovative business (JEI), a total and partial exemption from employer’s contributions on wages for new companies, and for all companies, an lower overall rate on wages thanks to the integration of Competitiveness tax relief (CICE);
  • financial aid: the Public Investment Bank (BPI) is mandated to support innovation and business growth in France through grants and capital financing for SMEs.

Thus, Research Tax Relief (CIR) finances, via a refundable tax credit each year, a tax credit which amounts to 30% of staff costs including salaries and social contributions (increased by a flat rate of 50%), and also 30% of depreciation of equipment used for R&D work (increased by a flat rate of 75%).

Innovation tax relief has also been set up and amounts to 20% of staff costs and depreciation expenses (also increased by 50% and 75% flat rate) allocated for example to the manufacture of a prototype and its adaptation to clients.

The status of new innovative business (JEI) offers companies carrying out research and development work, during the first 8 years of their life, total degressive exemptions from social contributions (reducing the overall social contribution rate to 25% maximum) and from taxes (corporation tax and local taxes).
It should also be noted that a company incorporated in France is eligible for all the incentives and grants offered by the European Union.

For the entire implementation of these systems as well as upstream, the incorporation of companies and, downstream, accounting, tax and payroll management, ATLANTIC PARTNERS in Paris can help you and guide you for a complete optimisation of your installation in France and in Europe.

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