Finance Act and Social Security Financing Act for 2025: Overview of R&D Tax Measures

Without structurally reforming the Research Tax Credit (CIR), the State is refocusing its tax base and revising certain calculation parameters. In March 2024, the General Inspectorate of Finance identified ways to achieve savings of approximately €400 to €450 million from this scheme. These recommendations have been largely adopted in the Finance Act for 2025.

Adjustments to the Research Tax Credit (CIR)

The law excludes several expense categories from the CIR tax base, including expenses related to patents and plant variety certificates (filing and maintenance fees, defense fees, depreciation allowances) and technological watch expenses. This first measure is expected to generate savings estimated between €200 and €250 million.

The text also provides for a reduction in the flat rate for considering staff expenses in determining operating expenses under the CIR, from 43% to 40%. This reduction would lead to savings of approximately €100 million.

The most symbolic measure involves the elimination of the mechanism that accounted for double the amount of expenses related to young PhDs (staff expenses and related general expenses). Ending this enhancement in the CIR tax base would generate approximately €90 million in savings.

These measures will take effect the day after the law is promulgated.

Additionally, the term “public subsidy” now has a legal definition. It is defined as “funding awarded by public law entities or by private law entities carrying out a public service mission.” For reference, public subsidies received by companies for operations eligible to the tax credit must be deducted from the calculation base of this credit.

Extension and Adjustment of the Collection Tax Credit (CIC) and Innovation Tax Credit (CII)

Companies will continue to benefit from the Collection Tax Credit (CIC) and Innovation Tax Credit (CII) until December 31, 2027. However, the CII rate will be reduced from 30% to 20% for expenses incurred from January 1, 2025.

Measures Related to Young Innovative Companies (JEI) and Other Tax Schemes

The 2025 Social Security Financing Act (PLFSS) includes a measure for Young Innovative Companies (JEI). The text proposes increasing the share of research expenses in JEI charges from 15% to 20%. This new rate will also apply to Young Growing Innovative Companies (JEIC) for expenses incurred from the first day of the month following the publication of the LFSS.

Finally, the IP Box and C3IV schemes remain unchanged.

 

 

Lucille Chabanel

Lucille has more than 14 years’ experience in tax law. She is a member of the corporate tax department since 2002 and joined the R&D group in 2004. She has […]

Jean-Charles Reny

Jean-Charles is part of the Research & Development service line (GI3). After having assisted large international groups regarding various tax issues (M&A, Supply Chain, or operational tax), he has been […]

Annabelle Caron

With a background in political sciences and finance, Annabelle is specialised in Research Tax Credit in France and abroad, in the GI3 practice in Paris.

Abdoul Beytouganov

Tax law student at Pars-Panthéon-Assas University, and currently working as an apprentice in Tax law in the GI3 team. He helps the team on the legal matters regarding the research […]