With the beginning of autumn comes the planning of IP budgets for the year to come. If you are looking for a solution to save some money, don't forget the French tax credit on patents.
Despite the general impression of French taxes, it is possible to save a lot on patents costs thanks to national tax system. More precisely for the past couple of years a tax credit called crédit d'impôt recherche or CIR has been offered for R&D expenses made in France, which also covers related patent costs.
Some questions were raised during the government change last May, with CIR criticised as a costly tax exception that escapes the general tax-raising programme launched with the country's new budget. But the new government has stood behind the CIR, showing its wish to support innovation.
As far as patent expenses are concerned, it is generally considered that filing and prosecuting costs are at least eligible for CIR. The system is open to all French companies subject to income tax. The amount of tax credit is proportional to the expenses made, the percentage principally depending on the total amount of expenses but also some other criteria that encourage newcomers or companies employing freshly graduated doctors. The system is based on a declarative approach. However a specific procedure is available giving the opportunity to check that the declaration is well-grounded. Under conditions, some cash may even be obtained.
Of course, you need to incur some R&D costs but hardly any patentable material comes without a little bit of R&D. Indeed, an interesting message from such a system is that patenting processes and R&D activities should be considered as a whole, even from a tax perspective.
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