R&D Tax News N° 29 – April 2016
Certification by the French Ministry of Research and projects’ eligibility
A project successfully used for a certification by the French Ministry of Research was later considered non eligible by experts from the Ministry, during an audit triggered by the company asking reimbursement of its RTC. The purpose of the certification is to demonstrate the company’s ability to lead R&D activities for a third party. It does not necessarily mean that the R&D project conducted by the company would be fully eligible without other conditions. In the case at hand, the company does not prove that the project concerns experimental development.
Precision of the RTC technical documentation
During a tax audit, when a company submits to the Administration several groups of projects divided into several sub-projects, batches and research topics, the Administration is entitled to control the eligibility of research expenses of each division without being limited to a global analysis of the main projects.
In the case at hand, the tasks performed within the sub-projects addressed different objectives, and each project involved specific technological locks that were dealt with separately by the company.
Eligibility of subcontracting expenses – Focus on the notion of “entrusted” work
Expenses related to a series of contracts concluded between a company and research institutions regarding eligible clinical trials were considered ineligible for the RTC purpose.
The company was not seen as having « entrusted » in the legal sense, research tasks to these institutions, despite their « contribution to researches conducted by [the research institutions] » through the financing of these trials and the supply of molecules required for the trials.
New R&D Tax Incentive in Poland since January, 2016
Since January 1st, 2016, companies operating in Poland have been able to deduct the amount of certain R&D-related expenditures from their taxable base. More specifically, they can deduct:
- 130% of salary cost and insurance costs of employees engaged in R&D activities
110% (for large companies) or 120% (for SME) of other R&D-related expenditures, which are composed of:
- The costs of equipment and supplies directly related to R&D activities
- The costs of expert opinion, advisory and equivalent services
- The costs of purchasing the results of R&D activities from a scientific institution
- The cost of the use of infrastructures is also covered as long as it is used exclusively for R&D purposes and providing such use does not result from an agreement with an entity related to the tax payer
- Some expenses of depreciation of material and intangible assets used for R&D activities
Furthermore, costs related to basic research are eligible only if they incur under a contract or agreement with a research institution.
The benefit of the tax incentive is independent of the type of R&D activities carried out and regardless of whether these activities are successful.
- Publication of a new version of the Guide on the Research Tax Credit by the French Ministry of Research (released in March)
- Launch of a new Program of Investments for the Future (PIA) confirmed by the Prime Minister, Manuel Valls for an amount of 10 billion euros
- Release of new administrative guidelines on March 15th, providing clarification on the Research Tax Credit (CIR) and Innovation Tax Credit (CII) claimed by companies certified by the French Ministry of Research.
|Thomas Perrin||Lucille Chabanel||Daniel Briquet||Lionel Draghi|
Tél.: +33 1 55 61 69 48
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|Laurent Gouzènes||Rémi Barnéoud (Lyon)||Pierre Hardoin (Marseille)|
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