The Innovation Tax Credit (CII) is a French tax measure that supports small and medium-sized enterprises (SMEs) in their innovation projects. Complementary to the Research Tax Credit (CIR), it helps finance the design of prototypes or pilot installations for new products that outperform those already on the market.
Key points of the CII:
- Target audience: Reserved for SMEs, i.e., companies with fewer than 250 employees and annual revenue of less than €50 million, or a balance sheet total not exceeding €43 million.
- Eligible expenses: costs related to the creation and development of new products, including salaries, subcontracting costs, and hardware and software expenses necessary to produce prototypes.
- Tax benefit: Provides a 20% tax credit on eligible expenses, up to a limit of €400,000 per year.
- Terms of use: Reduces the company’s tax liability. Any surplus can be refunded or carried forward to subsequent fiscal years.
In short, the CII is an essential financial lever for French SMEs seeking to innovate. It supports them during the crucial design and prototyping phases, thereby strengthening their competitive position in the market.