R&D tax credit for companies

Contact person 
Kate Margetts
Institution 
Ville de Grenoble
E-mail 
kate.margetts@ville-grenoble.fr
Country 
France
Do you want to share an instrument/policy or a knowledge Transfer practice? 
Innovation instrument(policy)
What are the following keywords/priorities which better fit the instrument/policy?  
Indirect support to business R&D (tax incentives and guaranteees)
Indicate the country from which the instrument (or policy) is 
France
What is the title/name of the instrument/policy? 
R&D tax credit for companies
Indicate the target group/beneficiaries of the instrument/policy 
SMEs only
Other
What is the aim/objective? 
This measure essentially adresses three priorities: - Increase rates of expenditure on research and technological innovation in enterprises; - Facilitate access of enterprises to skilled personnel; - Favour the protection and optimise the exploitation of intellectual property as a driver for innovation.
Give an overview of the instrument 
The Research Tax Credit was adopted back in 1983 with the objective of promoting research activities by firms across sectors, without discrimination. It is a specific response to an identified weakness characterising the French research and innovation system, namely traditionally weak private R&D expenditures. It underwent significant changes in 2004 when it was renewed for an undefined period of time to include a volume component in its calculation. The aim of the research tax credit is to reduce the costs of R&D for new, small and medium companies to encourage them to do research and thus to increase their competitiveness. As an example the following costs are considered as eligible expenses: patent costs, salaries of PhD students.
What is the date of creation of this instrument? 
Thursday, September 1, 1983
Is the instrument/policy still active? 
Active
Identify the main outputs/results (quantitative and qualitative) of the implementation of this instrument 
In September 2009, the Ministry for Research and Higher Education released the first quantitative results analysing the reform of the CIR. The paper highlights the ability of the measure to act as a shock absorber during the economic crisis and as a springboard in the post crisis period. According to the Ministry for Research, thanks to the CIR, the level of business R&D investment remained stable in 2008 (about €15bn). The 2008 reform has been valued by enterprises. Indeed, the number of registered enterprises clearly increased since the end of 2007 (+24%). In 2009, the number of registration has doubled compared to 2008 and the research expenses declared have clearly increased. Therefore, the CIR simplified mechanism results in the increased use of the credit by enterprises. Moreover, the study shows that a lot of businesses (53%) increased their R&D expenditures, particularly tthanks to the CIR. Except the automotive (-20%) and the aviation (-20%) sectors (particularly affected by the economic crisis from 2008), other sectors have increased their expenditures (+2%). According to a survey led in 2008 the CIR has also a number of positive impacts: 58% of businesses consider that the reformed CIR encourages the increase of R&D expenditures ; 34% recognize that the CIR fosters joint research ; 29% that it encourages the hiring of PhDs.
What is the co-financing/maximum rate allowed by the instrument/policy (if appl.)? 
n/a
Is this instrument/policy linked to a KT practice? 
No