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The Innovation Tax Credit (ITC), intended solely for SMEs, is designed to support companies that incur specific expenditure to innovate.
The Innovation Tax Credit, or ITC, is a tax scheme designed as an extension of the RTC, which applies to innovation-related expenditure on the design of prototypes or pilot installations for a new product. This scheme is available to SMEs subject to corporation tax in France and enables 30% of expenditure (up to a ceiling of €120,000) to be recovered in the form of immediate reimbursement or in the form of a credit for expenditure incurred on innovaton activities.
The innovation activities eligible under the scheme include:
However, the prototype or pilot installation must meet these two conditions:
Eligible expenditure that may be included in the calculation of the ITC is as follows:
Please note:
We will arrange a meeting to discuss your current R&D projects and determine whether they are eligible according to the criteria presented.
Once the eligible projects have been selected, we calculate all the associated expenditure according to the items presented.
Once the valuation has been carried out, we will compile the technical and financial reports depicting the projects selected for year N and the expenses incurred.
In the event of a request for additional information or a tax audit, we will assist you until you obtain your ITC.
FRS will support you throughout the whole process, from the selection of your projects to obtaining your ITC figure.
Do you already claim RTC and think you might have an ITC project?
One of our customers had been claiming RTC for several years. During the annual technical audit, we identified an internal IT software development project. This project didn’t meet the RTC criteria, but it provided functionality that was superior to what already existed in the market. We therefore claimed it via the ITC scheme. In this way, we optimised the value of the time spent by our customer on R&D and innovation projects.
Your project is innovative but does not contain enough scientific research to qualify for the RTC?
One of our customers in the IT management sector that used to claim RTC every year, had not spent any time performing R&D in 2022. However, during our annual 2022 audit we determined that their original project focused on developing new management processes, which made it eligible for a 2022 ITC claim. Thanks to the project’s progression and the foundation built via the 2022 ITC file, a RTC application is planned for 2023.