Research Tax Credit (CIR): Boost Your Cash Flow
Introduction
If your company engages in research and development (R&D), the Research Tax Credit (CIR) is a powerful fiscal tool to strengthen your cash flow. It allows you to recover up to 30% of eligible R&D expenses as a tax credit. But how do you qualify—and how can you optimize your claim? Let’s break it down. On t’explique tout.
What Is the Research Tax Credit (CIR)?
The CIR is a tax incentive designed to support companies that invest in R&D. It applies to all industrial, commercial, and agricultural businesses regardless of size or legal structure provided they are subject to corporate or income tax under a standard tax regime (IS or IR in France). .
Le taux du crédit d’impôt est de 30 % pour les dépenses de R&D jusqu’à 100 millions d’euros, et de 5 % au-delà.
What Expenses Are Eligible Under CIR?
- CIR eligibility is strictly regulated. The main eligible categories include:
- R&D Personnel Costs: Salaries and social contributions of researchers and technicians directly involved in R&D projects
- Depreciation: Deductions for the depreciation of assets used in R&D, particularly new equipment
- Operating Costs: A flat-rate estimate—50% of personnel costs and 75% of depreciation costs
- Subcontracting Costs: R&D work outsourced to public or approved private research bodies
- Technology Watch and Standardization Costs: No longer eligible under the 2025 Finance Bill
Why CIR Is a Game-Changer for Your Cash Flow
The CIR can become a major funding source for your startup or SME. By recouping up to 30% of your R&D costs, you strengthen your cash reserves and extend your runway.
Example: With €100,000 of eligible R&D expenses, you could receive €30,000 in tax credit. This amount can either offset your corporate tax or be refunded if you are operating at a loss..
How to Claim the CIR
- To benefit from the CIR, you must:
- Identify Eligible Activities: Ensure your projects qualify as R&D per the Frascati Manual
- Keep Detailed Documentation: Maintain evidence of your R&D work—reports, lab notes, patent filings, etc.
- File Form 2069-A-SD: This must be submitted with your annual tax return by May 15 if your fiscal year ends December 31
- Include Form 2069-A-1-SD: Required if your R&D expenses exceed €10 millionCommon.
Common Mistakes to Avoid
- CIR compliance is complex. Here are the key pitfalls to steer clear of:
- Incorrect Activity Classification: Not all technical activities qualify as R&D
- Poor Documentation: Lack of tangible evidence can disqualify your claim
- Unapproved Subcontracting: Work done by non-accredited providers is not eligible
- Missed Deadlines: Late submission of forms can cost you the entire credit
How Flag Helps You Navigate the Process
- At Flag, we help startups build a high-impact financing roadmap, including:
- Equity fundraising
- Non-dilutive financing: Bpifrance, grants, loans, etc.
- Tax optimization (CIR, CII, JEI)
- CFO support (CFO-as-a-Service)
Our expert team helps you identify eligible expenses, build a rock-solid CIR file, and optimize your tax positioning.
Additional Resources
Research Tax Credit (CIR) Service-Public.fr
Accredited Subcontractors for CIR & CII Service-Public.fr
Not sure where to start? Reach out, we’ll walk you through it.
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