As every year, the Ministry responsible for Research has published its 2023 “Research Tax Credit Guide“. While this document is not legally binding in case of an audit, it is intended as a practical guide to assist the taxpayer in the process of determining and documenting the RTC (CIR in French).
While the 2023 version of the RTC Guide does not seem to bring any major changes, a few adjustments can be noted.
Supporting documentation to be provided in the event of an audit: increasing granularity
Firstly, it should be noted that the ministry has expanded its requests regarding human resources.
Until now, the company had to indicate for each employee their function and role in the R&D operation. This new version adds an additional obligation by requesting, for each staff, the description of their contribution to the R&D operation, in addition to the previously requested information.
Similarly, while previously only the mention of the diploma of each staff member was required, it will now be necessary to specify the year in which it was obtained.
It should also be noted that the ministry explicitly requests that the supporting documentation provided be written in French. Only in exceptional cases, in agreement with the MESR, can technical documents be submitted in English. For foreign language annexes (contracts, etc.), a translation into French may be requested.
While the ministry has not yet updated its supporting documentation template, one can expect an upcoming update to align with these new recommendations.
Finally, minor adjustments have been made to the financial summary table template, including the addition of explanatory notes.
Subcontractor agreement procedure: rigor persists
The section on the procedure for the agreement of organizations to the RTC (CIR and CII) has been redesigned.
For private organizations, notable changes include:
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- changes in the outline of the scientific description of the R&D operation supporting the agreement request, and in the expected volumes in the number of pages. Emphasis is placed on the description of research results, to the detriment of the description of the scientific approach itself.
- for organizations working with third parties, it is requested to describe the role of their partners in carrying out the work.
- finally, an unprecedented level of detail is required to describe the scientific or technical contribution of each staff member involved in the R&D operation.
For service companies (consulting, engineering firms), the ministry requires the description of their own research work that is intrinsically eligible, following the restrictive approach adopted by the decree of June, 18 2021 (see our article on the subject). It is regrettable that the analysis work, although eligible for the RTC when it is necessary for a research operation by the ordering party (see the FNAMS decision of the Council of State and our article), cannot serve as a basis for an application for the RTC agreement.
The approval application forms are updated, including the Cerfa form n°10198*10, its instructions, and the R&D activity classification.
Finally, it should be noted that if an approved organization is the subject of a merger/takeover/takeover/transfer operation, the agreement becomes void. The ministry specifies that a new application must then be made in the name of the new entity.