2025 Finance Bill: What Startups Need to Know
Introduction
The 2025 Finance Bill introduces significant changes for the French startup ecosystem. With fiscal adjustments and new budget priorities, it's essential to understand these developments in order to adapt your funding strategy.
Key Measures Affecting Startups
1. Research Tax Credit (CIR)
Love money refers to initial funding from your close circle—friends, family, and early supporters. It signals trust and momentum, and can help you unlock other types of funding later. Usually non-dilutive, informal, but should be documented to support future fundraising.
- The CIR (Crédit d’Impôt Recherche) is undergoing several changes:
- Reduction in the valuation of overhead costs from 43% to 40%.
- Elimination of eligibility for patent-related and technology watch expenses.
- Removal of the “Young PhD” status, which previously allowed for a 200% valuation of R&D salaries for new doctoral graduates.
- These changes aim to refocus the tax credit on direct R&D expenses.
2. Innovation Tax Credit (CII)
The CII is extended until 2027, but the rate drops from 30% to 20%, with an annual cap of €80,000.
3. Young Innovative Company (JEI) Status
The JEI status is maintained, but the minimum R&D expenditure threshold increases from 15% to 20% of total expenses.
4. France 2030 Budget
The budget for the France 2030 plan is cut by €2.4 billion, now set at €5.3 billion. This reduction may affect available funding for innovation projects.
How Should You Adapt Your Funding Strategy?
- Given these changes, it’s crucial to:
- Reassess your project’s eligibility for tax incentives.
- Anticipate the budgetary impact on your financial projections.
- Explore alternative funding sources, such as equity fundraising or non-dilutive financing.
At Flag, we help you navigate this evolving financial landscape:
- Chez Flag, nous t'aidons à naviguer dans ce nouveau paysage financier :
- Optimization of your CIR and CII applications.
- Guidance on securing or maintaining JEI status.
- Identification of alternative funding aligned with your project.
Not sure where to start? Reach out, we’ll walk you through it.
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