French Research Tax Credit: key developments in 2025
The French Research Tax Credit (RTC), calculated at 30% of eligible R&D expenditure, remains one of the most attractive incentives in Europe. However, 2025 brings important legislative, case law and procedural changes that companies should consider.
Tighter legislative framework
The 2025 Finance Law introduces several measures that narrow the RTC base.
The flat-rate for operating costs, calculated on personnel expenses, has been reduced from 43% to 40%. The “young PhDs” scheme, which allowed companies to double eligible expenses for newly recruited PhD holders over 24 months, has been abolished. Patent-related costs and technology watch expenses are no longer included in the RTC base. In addition, the scope of public subsidies that must be deducted has been extended to include grants from private law entities entrusted with a public service mission.
By contrast, a recent judgment of the Paris Administrative Court held that, prior to the 2025 Finance Law, Bpifrance aid did not qualify as a public subsidy to be deducted from the RTC base (TA Paris, n°2406541, Sté Cleyrop).
At the same time, the Innovation Tax Credit (ITC) and the Collection Tax Credit have been extended until 31 December 2027. However, the ITC rate has been reduced from 30% to 20% for expenses incurred from 1 January 2025.
Notable case law
Recent case law clarifies the scope of eligible costs.
The Versailles Administrative Court of Appeal held that non-scientific staff may qualify as research technicians only where they provide direct and indispensable technical support to R&D activities (CAA Versailles, n°24VE01574, SAS TAP Holding).
The Douai Administrative Court of Appeal distinguished between different amortisation costs. Assets used to design a prototype qualify for the RTC. By contrast, assets relating to the completed prototype used for testing do not qualify if the prototype is not directly allocated to research activities (CAA Douai, n°24DA01095, Sté Green Big).
The Paris Administrative Court of Appeal ruled that an approved private research organisation providing a global engineering service may include certain R&D expenses in its RTC base. This applies where the expenses are incurred on its own account, are not recharged to clients and the results are not transferred (CAA Paris, n°23PA02531, Sté Assystem).
Courts have also clarified procedural aspects. SMEs entitled to immediate RTC reimbursement may choose instead to offset the credit against tax due and claim any surplus at the end of the four-year period (CAA Toulouse, n°23TL02231, Institut Coopératif du Vin).
Finally, the French Supreme Administrative Court confirmed that a company that assigns a tax receivable under a “cession Dailly” arrangement retains standing to challenge a tax refusal where it remains jointly liable for that receivable (CE, n°489721, Sté Ragt Semences).
Updated ruling templates and RTC guide
The Ministry of Research has updated its ruling request templates and the 2025 RTC Guide. The updates focus on demonstrating the state of the art, identifying scientific or technical uncertainties and documenting each employee’s contribution.
The Guide also clarifies what qualifies as activities that are indispensable to R&D and revises the section on software R&D. It confirms that novelty alone is not sufficient.
Outlook for 2026
The 2026 Finance Law extends existing innovation tax incentives without major reform. The RTC and ITC remain unchanged. The Collaborative Research Tax Credit, the Young Innovative Company regime and the C3IV green industry tax credit are extended until 2028.
