The French R&D tax credit (CIR) in biotech: building a sound base

The French R&D tax credit (CIR) is one of the most important non-dilutive funding levers for a biotech, since each year it accounts for a significant share of the cash position when it is well built, and it exposes the company to reassessments as well as to delays in collection when it is poorly framed, which is why it is worth understanding its base precisely rather than estimating it roughly.

The framework is set by article 244 quater B of the Code général des impôts and clarified by administrative doctrine in the Bulletin officiel des finances publiques, under reference BOI-BIC-RICI-10-10. The standard rate is 30% on the portion of eligible research expenditure up to and including 100 million euros, dropping to 5% above that threshold, so that an early-stage biotech falls in practice under the 30% rate.

The base rests first on personnel expenditure allocated to research, which is increased by an overhead allowance now set at 40% of those expenses, a rate lowered from 43% to 40% by the 2025 Finance Act (Law No. 2025-127 of 14 February 2025, article 55) for expenses incurred from 15 February 2025 onward, and therefore applicable to the 2026 and subsequent financial years. To this core are added the depreciation of assets allocated to R&D and subcontracting entrusted to accredited bodies within the prescribed limits, while public grants received for the projects concerned are deducted, the credit being obtained by applying the rate to the net base.

Two points deserve particular attention in biotech. First, subcontracting, because only work entrusted to accredited bodies qualifies for the credit, and a non-accredited CRO or CDMO can disqualify an expense one believed to be eligible. Second, the interplay with the young innovative company (JEI) status, which grants exemptions from employer social security contributions on research staff and interacts with the calculation of eligible personnel expenditure, which calls for consistent treatment.

In practice, the CIR is filed via form 2069-A-SD attached to the tax return, and the receivable can be pre-financed, notably through Bpifrance, so as not to wait for the refund. For an executive, the key is to connect this calculation to the rest of their management, because the year's CIR, its collection month and its possible pre-financing are part of the cash trajectory and not of a separate table.

This article is informational and does not constitute tax advice. The exact terms should be validated with your chartered accountant in light of your situation.

Sources

Article 244 quater B of the Code général des impôts (Légifrance) · Law No. 2025-127 of 14 February 2025, the 2025 Finance Act, article 55 (Légifrance) · Instruction BOI-BIC-RICI-10-10 (BOFiP-Impôts) · Guide to the research tax credit, French Ministry of Higher Education and Research (MESR)