Everything you need to know about the tax credit
In terms of French taxation, THE tax credit constitutes one of its cornerstones. It must be said that these different tax advantages encourage taxpayers to invest in certain sectors. Here is everything you need to know about the different tax credits existing and which will allow you to benefit from various tax advantages. \n
What is a tax credit?
\nA tax credit is a sum which is charged to the gross amount of tax that you have to pay. This means that you will be entitled to a partial or full refund of expenses you have already paid. It is indeed the primary consequence of a tax provision, which will allow you to benefit from various advantages. \n\nIt is important to know that there are different types of tax credits in France. For example : \n- \r\n
- The apprenticeship tax credit \r\n
- The tax credit for competitiveness and employment (CICE) \r\n
- The research tax credit (CIR) \r\n
- The tax credit for business manager training \r\n
Do not confuse a tax credit with a tax reduction
\nBe careful though, you should definitely not confuse a tax credit with a tax reduction. Indeed, in the event of a surplus, a tax credit will allow you to receive a partial or full refund from your tax center. You will therefore be able to benefit from the difference, if you are not taxable or, if your tax is lower than the amount of the tax credit. \n\nLet's take a concrete example: if you have a tax amounting to €2,000 and you benefit from €5,000 of tax credit, in the case of a tax reduction you will not pay taxes and you will not benefit from the 3,000 euros difference. If it is a tax credit, you will not pay taxes either, but in this case you will receive the difference. \n\nAlso read: The best places to work as a freelancer\r\nThe different types of tax credits
\nIt is also important to know the different types of tax credit that exist in France. \nThe tax credit for competitiveness and employment (CICE)
\nTHE CICE represents a large tax advantage for companies that have opted for a real tax regime. The rate of the tax credit is 6% and the basis of this is made up of remuneration not exceeding 2.5 times the amount of the SMIC (which will be calculated on the legal duration of work). It will concern all employees of a company, including apprentices, employees on professionalization contracts and subsidized contracts. \nThe research tax credit (CIR)
\nThis system applies to the various research operations carried out by companies subject to a real tax regime. The basis of this tax credit is made up of the following expenses: \n- \r\n
- Annuities for amortization of patents, plant variety certificates and fixed assets which are allocated directly to research operations \r\n
- Remuneration of researchers \r\n
- The cost of research operations that are subcontracted \r\n
- Operating expenses, fixed at a flat rate of 50% of personnel expenses and 75% of depreciation annuities \r\n
- Expenditure on technology monitoring \r\n
- Development costs for new collections (for companies specializing in textiles) \r\n
- Expenses for taking out, maintaining and defending patents and plant variety certificates \r\n
- Innovation spending \r\n
