Audit of the research tax credit (CIR)
The research tax credit (CIR) is a powerful incentive, but it is closely audited. The tax authorities, assisted by experts from the ministry for research, frequently challenge the scientific eligibility of the work or the nature of the expenses declared. A rejection can represent several years of tax credit. The firm secures your CIR filings and defends your cases, working alongside your scientific teams.
- Legal basis
- French Tax Code art. 244 quater B (CIR), 244 quater B bis (collaborative research)
- Expenses
- R&D staff costs, depreciation, accredited subcontracting, technology watch, patents
- Audit
- Tax audit assisted by experts from the ministry for research
- Typical issue
- Scientific eligibility of the work and characterisation of the expenses
- Profile
- Innovative companies, mid-caps and SMEs, young companies
The research tax credit in brief
The research tax credit (French Tax Code art. 244 quater B) supports companies' research and development expenditure. Eligible expenses notably include the staff costs of researchers and technicians assigned to R&D, the depreciation of research equipment, subcontracting entrusted to accredited organisations, as well as certain technology-watch and industrial-property protection expenses.
The benefit of the CIR requires genuinely eligible work in the scientific sense (fundamental research, applied research, experimental development) and correctly characterised expenses. It is precisely on these two fronts that the audit concentrates.
A two-dimensional audit
The CIR audit has one particularity: it combines a classic tax examination with a scientific assessment. The tax authorities may seek the opinion of officials from the ministry in charge of research to assess the reality and eligibility of the work.
- Request for information followed, where applicable, by a full tax audit;
- Scientific review of the eligibility of the R&D projects;
- Verification of the characterisation and calculation of the expenses;
- Review of the subcontractors' accreditation and the subcontracting conditions.
The defence therefore plays out as much on the scientific front (demonstrating the R&D approach) as on the legal and accounting front.
The most frequent grounds for rejection
Challenges most often relate to: the absence of an R&D character of the work (mere improvement or routine engineering recharacterised), the qualification of the staff and the time allocated, subcontracting (accreditation, dependence, double counting), the treatment of public subsidies to be deducted from the base, or insufficient scientific supporting documentation. Contemporaneous, structured documentation of the projects is decisive.
Securing upstream, defending during the audit
Upstream, the firm helps structure the documentation of the projects (state of the art, scientific obstacles, experimental approach) and secure the positions taken through a CIR advance ruling where appropriate. During an audit, the defence focuses on the reality of the R&D approach, the characterisation of the expenses, the subcontractors' accreditation, and compliance with procedural safeguards, up to the tax courts if necessary. We work hand in hand with your scientific teams to translate the technical work into legal arguments.
CIR audit: your questions
Why does the CIR audit involve the ministry for research?
Because CIR eligibility requires a genuine research and development approach. The tax authorities may seek the opinion of officials from the ministry in charge of research to assess the scientific nature of the work; the defence must therefore be as scientific as it is legal.
Which expenses are eligible for the CIR?
Notably R&D staff costs, the depreciation of research equipment, subcontracting to accredited organisations, technology watch and certain industrial-property costs (French Tax Code art. 244 quater B). Their precise characterisation is a central issue in any audit.
Can the tax authorities challenge several years of CIR?
Yes, within the applicable statute of limitations. The cumulative amount at stake can be significant, hence the importance of securing the filings and reacting quickly to any request for information.
How can I secure my CIR upstream?
Through rigorous scientific and financial documentation of the projects and, where appropriate, through a CIR advance ruling allowing you to obtain the tax authorities' position before filing.
Does the innovation tax credit (CII) follow the same rules?
The CII, intended for SMEs for certain innovation expenses, falls under a related but distinct framework, with its own conditions. Its audit follows a comparable logic and calls for the same documentary rigour.
A challenged CIR?
A confidential first exchange to assess the eligibility of your work, structure the scientific and legal defence and preserve your tax credit.
This page presents the audit of the CIR for information purposes only; each case calls for a specific scientific and legal analysis. References to the French Tax Code (art. 244 quater B) and to the BOFiP administrative doctrine in force at the date of writing.