The research tax credit

Phase: Anticipation
  • Access to finance
  • Employment incentive
  • Fostering innovation
  • Matching/Networking
  • Support of SMEs
Senast ändrad: 10 September, 2020
Lokalt namn:

Crédit impôt recherche - CIR

Engelskt namn:

Research tax credit


The R&D activities which can benefit from the regime are defined as:

  • fundamental research,
  • applied research, and
  • development research.

The main categories of expenses which can give right to the tax credit are:

  • depreciation of assets dedicated to R&D projects (including patents acquired);
  • costs of employees with the appropriate technical skills (including social charges) dedicated to R&D projects;
  • operating expenses dedicated to R&D assessed at 75% of the former amount;
  • subcontracted research activities (even within the EU);
  • certain types of expenses related to compliance with regulatory standards.

Main characteristics

This research tax credit covers 30% of all R&D costs up to €100 million, and 5% above this threshold. As of 2013, innovation expenses incurred by SMEs are also eligible for the research tax credit (up to €80,000 of tax credit a year).

France’s research tax credit is also a powerful incentive for research partnerships, as all expenditure contracted out to public sector bodies is double-counted, thereby effectively doubling the research tax credit. Salaries paid to junior final-year doctoral and post-doctoral research personnel on their first permanent contract are quadruple-counted when calculating the research tax credit for two years.

The research tax credit and 'innovative new company' (JEI) schemes have been fixed for five years to provide businesses with visibility and legal security.

France’s public investment bank, BPI France, offers two solutions to promote the use of the research tax credit by micro enterprises and SMEs, by guaranteeing and pre-financing the research tax credit.


  • National funds

Involved actors

National government
tax administration


Last refined data available are related to the year 2015. In 2015,  20,179 businesses benefited from the research tax credit, declaring €22,576 billion of research expenditure in 2015. Overall, from 2007 to 2015, the number of businesses declaring research expenditures has been multiplied by 2.6: 25,600 companies in 2015 and 9,890 in 2007. Total tax relief for research tax credit recipients amounted to €6.25 billion in 2015. Since 2008, the annual amount of the tax credit recipient is each year over €4.5 billion in comparison to less than €1 billion until 2005.

This evolution is confirmed by the latest (but still provisional) figures available regarding year 2017: in 2017, the total tax relief for research tax credit amounts to 6.49 billion euros. SMEs are the main beneficiaries of this credit: over the period 2009-2015, the weight of SMEs (fewer than 250 employees) has increased to the detriment of large companies.  In 2017, they represent 82% of the companies benefiting from this measure, i.e. 12,542 SMEs. The research tax credit is mainly available to businesses in the manufacturing industries (58.3% in 2015 and 61% in 2017), and especially electrical and electronics industry first and then pharmacy and perfumery industry.

More generally, a clear increase in both the total amount of R&D expenditure and in the cost of the measure can be observed over the period1990-2014, accompanied by an increase in R&D activities in firms subscribing to this instrument (Salies, 2017). The research tax credit is now analysed as a tool which has contributed to the recovery of an R&D effort that was tending to diminish as a result of the deindustrialization process observed in France in recent years.

As it is also the case regarding the impacts of the research tax credits on R&D expenditures or on patents applications, the impacts of the research tax credit on employment have raised a lot of debates and are not fully clear. However:

  1. the research tax credit leads to a reduction in the employment cost.
  2. R&D employment had been growing continuously from 2001 to 2011, this was clearly not the case of global employment. The research tax credit thus seems to have a positive impact on R&D employment. A recent study (Salies, 2017) estimates that 37,472 research jobs have been created thanks to this measure from 2008 to 2015.
  3. Especially since 2008, the research tax credit may have positively contributed to an increase in employment opportunities for young academics (PhD), but specifically for engineers with PhD (Margolis, Mott, 2015), as a result of the implementation of a specific sub-measure targeting 'young doctors'. At the same time, this seems to have come at the expenses of young engineers without PhD.

Overall, available studies conclude that the research tax credit has a positive effect on the growth of firms' research and development (R&D) expenditure and, albeit to a lesser extent, on their R&D personnel, the employment of young doctors, the propensity of firms to file patents and their productivity gains.


One of the key strengths of the research tax credit lies in its accessibility, which has been further improved thanks to the reform of 2008 (Eurofound 2018); In addition, France ranked first in Europe for corporate tax rates on R&D operations, taking into account tax bases, depreciation allowances, tax exemptions and tax credits (KPMG, 2016). By reducing the costs of the R&D, France might be regarded as an attractive investment location, according to such benchmarks. With its research tax credit, France is the OECD country that spends the most in terms of indirect support to the research.

France was ranked fourth in the world in 2018 for the average cost of employing a researcher once tax incentives are taken into account, with lower costs than in the United States, Japan and Germany (ANRT, 2018).


One of the weaknesses is the lack of transparency of this instrument as many information are covered by the tax administration secrecy. It is thus not possible to know how many tax credits each company received. One may also mentions recurring debates about possible misuse of this instrument, especially regarding the correct qualification of expenses eligible to the tax credit (Cadic, 2018). Beyond, most importantly considering the cost of this measure, the available studies do not make it possible to conclude as to the degree of effectiveness of the system on an important point : they especially do not yet make it possible to fully assess the expected impact of the tax credit considering the economic activity, in particular in terms of economic growth and job creation, taking into account the specific characteristics of each sector (CNEPI 2019)


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