Updated: Apr 23, 2021
Systems such as the “crédit d'impôt recherche” (research tax credit), the “crédit d'impôt innovation” (innovation tax credit), or the “jeune entreprise innovante” (young innovative company) are all key to the growth of companies dedicated the research and development of their products. They can nonetheless be complex to implement: their declaration can require a certain level of detail, especially because there are many deadlines to respect, and it is not always easy to see clearly. In this article, we will take a look back at the main deadlines to keep in mind concerning these three systems generally but also specifically in the context of the recovery plan following Covid-19.
CIR and CII procedure:
In general, tax credits such as CIR and CII are declared within 3 to 5 months following the end of the fiscal year during which the expenses were incurred, simultaneously with the statement of the balance of taxes on companies and the tax return. If a company ends its fiscal year on December 31 of the year, it will have until May 15 of the following year to declare its CIR / CII (i.e. a period of 4 and a half months). On the other hand, companies who do not follow the calendar will have to declare their CIR / CII within three and a half months of the end of their fiscal year. In any case, it is always useful to remember that the declared CIR / CII will only take into account the expenses recorded in the previously closed fiscal year.
Accelerated reimbursement as part of the recovery plan
Due to Covid-19 and its unprecedented economic repercussions, the General Directorate of Public Finance announced on March 2, 2021, the renewal of the accelerated procedure for the reimbursement of tax credits refundable in 2021 as part of the measures taken to support companies’ cash flow.
From now on, an eligible company can request the restitution of the balance of its CIR / CII debt without waiting for the filing of its tax return. In order to request an accelerated reimbursement, the company can go to impots.gouv.fr to make the declaration electronically, by attaching two essential documents:
The tax credit refund request (form No. 2573);
The declaration used to justify the tax credit (declaration No. 2069-RCI), and any annexes.
A different status: Jeune Entreprise Innovante
Regarding the JEI status, there is no particular deadline to be observed. However, it is important to be one step ahead and anticipate certain specific aspects of the system.
As a reminder, the status of JEI is granted to SMEs which incur a certain volume of R&D expenditure, granting them several advantages such as exemptions from social contributions and / or tax (within the limit of compliance with the regulations, i.e. a ceiling of € 200,000 accumulated over three fiscal years). In order to obtain this status, the company must meet the following conditions:
Commit a volume of R&D expenses of at least 15% of tax deductible expenses for the year
Have a company younger than 8 years old
Be an SME (less than 250 employees and a revenue less than 50 million or a balance sheet of less than 43 million euros)
Have equity continuously owned at least 50% by natural persons or certain legal persons listed by law.
Have an activity that must not have been created as part of a concentration, restructuring, extension of pre-existing activities or the resumption of such activities
Each criterion indicated above must be valid at the end of each fiscal year. Their validity must be checked systematically (in advance when the information is available), and if necessary, corrective actions must be taken in order to regularize the situation.
In addition, it is also advisable to make a prior request to the administration concerning the validity of these criteria, and in particular concerning the R&D expenses contributing towards the calculation of the 15%. This request is called a rescript and can be submitted at any time during the first 8 years of the business and takes an average of 1 to 2 months to complete (this is a file presenting an R&D project). Once received, the administration has three months to respond. It is therefore recommended to initiate the rescript request 4 or even 5 months before the first salary payments.
Note that there have been no measures taken regarding the JEI in the Covid-19 recovery plan, in particular for accelerated processing of rescript requests.
We also advise companies that would like to do without a rescript request (which is not mandatory), to have their criteria validated by experts so as not to risk potential URSSAF litigation later.