7. Tax measures to foster competitiveness
The competitiveness and employment tax credit (CICE) will reduce labor costs by 4% in 2013, and by 6% from 2014, amounting to €20 billion in savings for companies. This tax credit is calculated in proportion to the company’s gross payroll costs, excluding all salaries greater than 2.5 times the national minimum wage (SMIC).
More than 2,000 foreign companies among the beneficiaries of the research tax credit between 2008 and 2010.
(French Ministry for Higher Education and Research, 2012)
credit remains the most attractive R&D tax incentive program in Europe: Tax break of 30% of annual expenses, up to €100 million, and 5% above this threshold. This rate is doubled for R&D carried out with public-sector bodies and is quadrupled for R&D undertaken by junior final-year doctoral and post-doctoral research personnel in their first two years of employment. Extension of eligibility to include innovation expenses incurred by SMEs starting in 2013. The research tax credit will remain unchanged for five years, giving companies to provide businesses with visibility and legal security.
France is ranked very favorably by effective* corporate tax rates:
in 1st place for R&D operations, ahead of the United Kingdom (5th) and Germany (11th).
in 6th place for manufacturing operations, ahead of Germany (10th) and Italy (13th).
rate which takes into account the tax bases in different countries
(KPMG, “Competitive Alternatives”, 2012)