Doing Business in France - RSM International

4.4.2 Research and development (R&D) tax credit
The R&D tax credit is computed on the portion of eligible expenses incurred during a
calendar year. The applicable rate is 30% for the portion of the R&D expenses below
€100,000K and reduced to 5% for the portion exceeding €100,000K. Higher rates
apply, for a two-year period, to both newly created companies and companies that
have not benefited from the R&D tax credit in the previous five years (40% for the
first year, 35% the second).
In order to compute the R&D tax credit, qualifying R&D expenses include in particular:
(i) payroll expenses and depreciation allowances for equipment directly involved in
carrying out R&D programs, (ii) expenses relating to the registration, maintenance
and defense of patents, (iii) depreciation allowance of patents acquired from third
parties, (iv) expenses for research entrusted to public or private institutions,
universities, and technical centers, (v) expenses relating to R&D activities carried out
in the EU, Iceland and Norway.
4.5 Value added tax (VAT)
4.5.1 Taxable persons and transactions
All entrepreneurs, i.e. persons making taxable supplies of goods and services in the
course of a business, are taxable persons for VAT purposes. Importation of goods
is also subject to VAT, regardless of the type of the importer. However, small and
medium-sized enterprises with a small turnover are exempt but may elect to become
taxable persons.
Unless expressly exempt, all supplies of goods and services, including intra-
Community acquisitions and self-supplies, made in the course of a business, are
subject to VAT.
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