CIR: assessment of the eligibility of subcontracted ancillary operations
In a ruling dated 22 July 2020, the State Council (Conseil d’Etat) ruled that a company that subcontracts the performance of services (in this case analytical studies and tests) necessary for the carrying out of research operations that it undertakes may withhold the corresponding expenses for the calculation of the tax credit, even if these operations taken in isolation do not constitute research operations.
The State Council thus overturned the decision of Paris’s Administrative Court of Appeal, which had refused to take into account these expenses because they did not in themselves constitute genuine, clearly individualized search operations, even if these operations were essential to the successful completion of the research undertaken (CAA Paris 20-12-2018 n°18PA00256).
The judgment thus contradicts the administrative doctrine according to which “the expenses incurred (for carrying out research operations entrusted to approved public or private research organisations) must correspond to the carrying out of genuine, clearly individualised research and development operations” (BOI-BIC-RICI-10-10-20-30).
Following this decision in favour of companies, our team is at your disposal to enlighten you on the practical implications of this decision.
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