Did you know that your technology watch expenses can be eligible for a tax credit? In France, the research tax credit (crédit d’impôt recherche – CIR) is a tax measure designed to encourage companies to invest in research and development (R&D), including information for innovation.
This is why the costs associated with technology watch can be considered as eligible expenses under the CIR. The CIR rate applied is 30% of R&D expenditure up to 100 million euros, and 5% for the fraction of expenditure in excess of 100 million euros. Eligible expenses may include documentary research, technology watch, patent acquisition, etc.
To qualify for the CIR, certain conditions must be met. For example:
- Direct link with R&D : Technology watch must be directly linked to the company’s R&D projects. It should be used to identify new technologies, trends or innovations likely to influence or improve current R&D projects.
- Documentation and justification : The company must be able to document and justify how technology watch contributes to its R&D activities. This includes how the information gathered is used to make R&D decisions.
- Integration into the R&D process : Monitoring must be integrated into the company’s R&D process, and not be an isolated activity. It must have an impact on the development or improvement of new products, services or processes.
- Compliance with CIR criteria : As with all expenses eligible for the CIR, technology watch activities must comply with the general criteria of the scheme, particularly in terms of knowledge creation.
- Declaration and follow-up : The company must declare these expenses in its CIR declaration, and be ready to justify them in the event of a tax audit.
The precise rules governing the eligibility of expenditure for the CIR can be complex, and may vary depending on the company’s situation. That’s why it’s advisable to call in a tax expert or R&D consultant to ensure that all requirements are met and to optimize the benefit of the CIR.
