French General Tax Code
In forceI. - 1. Companies meeting the conditions set out in Article 44 sexies-0 A are exempt from income tax or corporation tax on profits made in respect of the first profitable financial year or tax period, this period of total exemption for profits made may not exceed twelve months.
Profits made in respect of the financial year or tax year following this exemption period are only subject to income tax or corporation tax for half of their amount.
2. The benefit of the exemption is reserved for companies that meet the conditions set out in 1 during each financial year or tax period in respect of which the exemption is likely to apply.
3. If at the end of a financial year or tax period the company no longer meets one of the conditions required to benefit from the status of young innovative company carrying out research and development projects, it permanently loses the benefit of the exemption provided for in 1. However, the profit made during this financial year or tax period and the following financial year or tax period is only subject to income tax or corporation tax for half of its amount.
4. The total period of application of the 50% allowance provided for in 1 and 3 may in no case exceed twelve months.
II. - The profit exempted in respect of a tax year or period is that declared in accordance with the procedures set out in Articles 50-0,53 A, 96 to 100,102 terand 103, less the following gross proceeds which remain taxable under the conditions of ordinary law:
a. Income from company shares or units, and the results of companies or organisations subject to the regime provided for in article 8;
b. Income corresponding to grants, donations and debt waivers;
c. Income from receivables and financial transactions for the amount that exceeds the financial expenses incurred during the same financial year or tax period.
III. - Where it meets the conditions required to benefit from the provisions of one of the schemes provided for in Articles 44 sexies, 44 quindecies, 44 sexdecies, 44 septdecies, 244 quater E or the scheme provided for in this article, the young innovative company carrying out research and development projects may opt for the latter scheme, within nine months of starting its activity, or within the first nine months of the financial year or period in respect of which the option is exercised. The option is irrevocable if, at the end of the financial year or period in respect of which it was exercised, the conditions set out in article 44 sexies-0 A are met.
IV. - The benefit of the exemption provided for in I is subject to compliance with Commission Regulation (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid.
