Research tax credit: the 2022 guide is out!

The 2022 guide to the research tax credit (CIR (1)) has been published on the website of the Ministry of Higher Education and Research (2). The guide is available, this year, in two versions: the integral guide and the approval process guide.

Reminder: Companies that carry out certain research operations can benefit, per calendar year, from a tax credit equal to 30% of the fraction of eligible expenses not exceeding €100 million (5% beyond). Innovation expenses incurred by SMEs are eligible for a tax credit equal to 20% of eligible expenses, within the overall limit of €400,000 per year.

With no regulatory value, this guide is drawn up to help companies that benefit from the research tax credit and from the “Young Innovative Company” (JEI (3)) Scheme to prepare their application for research tax credit or their request for an answer to a specific legal interpretation interrogation or an authorization. It focuses on research and development (R&D) activities. Innovation expenditure is dealt with in the annex. In particular, the eligible expenditure, the basis of assessment and the calculation of the CIR are exposed. As such, the guide considers the abolition on January 1st, 2022, of the doubling of the base in the case of R&D work subcontracted to public entities.

As it may be expected, the guide also gives many useful addresses for companies wishing to learn about these tax advantages. And an annex has been added to integrate the new tax credit for companies that incur expenses under a collaboration contract with research and knowledge dissemination organizations.

Note: The amount of the tax credit for collaborative research is set at 40% of the invoiced expenses (less certain aids) without exceeding the overall annual limit of €6 million. The rate is increased to 50% for SMEs (headcount < 250 employees, turnover < €50 million or annual balance sheet total < €43 million).

Furthermore, the guide includes some recommendations that help companies to form the supporting file that may be required by the tax administration in the event of an audit of the CIR and refers to a template. If they want to avoid difficulty in detailing all their research works, companies are advised not to wait the end of the year to form the supporting file but to do it throughout the year as each research is carried out.

In practice: This file allows, in addition to presenting the company’s research work to the administration during an inspection, to fill out its CIR application more easily and to support a request for reimbursement.

(1) Crédit d’Impôt Recherche (CIR)

(2) Ministère de l’Enseignement Supérieur et de la Recherche (MESR)

(3) Jeune Entreprise Innovante (JEI)