Have a question? We're here to help.
Our team will get back to you within 48 hours.
F.A.Q.
In this context, having a well-structured CIR process and a tailored approach is essential to securing your R&D investment. Flag supports you throughout the process and helps you manage your risk effectively.
In this context, it is essential to have a well-structured CIR process and a personalized approach to secure your R&D investments. Flag accompanies you on this journey and helps you to effectively manage your risk.
If you declare your CIR at the time of your year-end tax filing, it will be offset directly against your corporate income tax liability. If your corporate tax liability is too low, which is often the case for startups in the growth stage, you can request an immediate refund. It generally takes between 2 and 6 months to receive the tax credit.
If you submit a retrospective claim, the process can also take several months, as the tax authorities often carry out checks before releasing the funds. These timelines are based on averages observed across our clients, and processing times can vary significantly between local business tax offices (SIE).
It is entirely possible to include the employment costs of company directors, whether salaried or self-employed under the French TNS status, in the CIR eligible expenditure base.
Depending on their qualifications, they may be classified as researchers or research technicians. As with other personnel costs, the eligible amount is calculated on a pro rata basis according to the time spent on R&D activities.
Please note that, for directors or founders to be included in the CIR calculation, they must be remunerated directly by the company or through a formal staff secondment arrangement. Dividends and stock options are not eligible.
Yes. As long as your company is incorporated under French law and carries out R&D activities in France, you may be eligible for CIR/CII, even if the work is performed on behalf of a foreign parent company.
For example, a company such as Google could potentially claim CIR for research activities carried out in France through a French subsidiary.
Technically, no. You can submit the CERFA forms relating to CIR/CII with your corporate tax return and even receive the CIR/CII tax credit without providing a technical file at that stage.
However, for up to three years after the claim is submitted, the standard tax limitation period in France, you may be subject to a review by an expert from the French Ministry of Research. The review will assess both the validity of your calculations and the eligibility of the R&D activities claimed.
In that case, you will be required to provide a detailed supporting technical file describing the R&D work carried out, the resources involved, the state of the art at the start of the project, and other relevant elements. These reviews have become increasingly frequent in recent years. For this reason, it is strongly recommended that a supporting technical file be prepared for every CIR claim, so that you can respond to any request from the authorities and reduce the risk of a tax reassessment. For retrospective CIR/CII claims, requests for supporting information are almost systematic, making a technical file effectively essential.
An innovative project is one that introduces something new, or significantly improves and optimises an existing product, service or process.
It is important to note that innovation is not limited to technology. It can also apply to other areas, including:
- Service innovation (e.g., the creation of low-cost airlines)
- Marketing innovation (e.g., the shift to online purchasing)
- Organizational innovation (e.g., the Taylorist work model)
- Social innovation (e.g., the model developed by Emmaüs)
French companies often only seek innovation funding once they realise their internal budget is no longer sufficient. Unfortunately, by then it is often too late.
Because many companies, particularly startups and SMEs, are not fully aware of the innovation funding schemes available to them, they often hesitate to explore these opportunities, mistakenly assuming they are not eligible.
However, there is a wide range of public support available. Organisations such as Bpifrance, ADEME, French regional authorities, European institutions and industry bodies such as the CNM and CNC are actively looking for projects to fund, covering different stages of development, including market launch and international expansion.
At Flag, our experts work closely with a wide range of funding organisations on a daily basis and can help you identify the right opportunities, plan your funding strategy and prepare the right applications at the right time.
One of the first metrics a bank or an organisation such as Bpifrance will look at is your debt ratio, commonly referred to as the gearing ratio.
This ratio is calculated by dividing net debt by shareholders’ equity, using the following formula:
Net debt / Shareholders’ equity = X%
Net debt reflects the company’s overall financial indebtedness. It includes medium- and long-term borrowings, short-term debt, and any excess cash available:
Medium- and long-term borrowings + short-term debt − excess cash = net debt
When cash reserves exceed borrowings, the company is said to have negative net debt, or a net cash position.
Shareholders’ equity consists of paid-in capital and accumulated retained earnings, including reserves, retained earnings brought forward and the profit or loss for the financial year.
Sounds a little technical? Get in touch with Flag. We can quickly assess where your gearing ratio stands compared with the current lending criteria applied by different financial institutions.
