French General Tax Code
In forceI. - The tax credit defined in'article 244 quater E is deducted from the income tax due by the taxpayer in respect of the year during which the assets eligible for the scheme are acquired, created or leased. Where the eligible assets are acquired, created or leased in respect of a financial year that does not coincide with the calendar year, the corresponding tax credit is deducted from the income tax payable by the taxpayer in respect of the year in which the financial year ends. If the amount of the tax credit exceeds the tax due for that year, the excess is used to pay the income tax due for the following nine years. The unused balance is reimbursed at the end of this period, up to a maximum of 50% of the tax credit and an amount of €300,000.
However, at the request of the taxpayer, the unused balance may be reimbursed from the fifth year onwards, up to a maximum of 35% of the tax credit and an amount of €300,000.
The claim on the State corresponding to the unused tax credit is inalienable and non-transferable, except in the cases and under the conditions provided for in articles L. 313-23 to L. 313-35 of the monetary and financial code. It is not taxable.
In the context of a transaction mentioned in the second paragraph of III of article 244 quater E, the fraction of the claim that has not yet been allocated is transferred to the beneficiary of the transfer.
In the event of a merger or similar transaction benefiting from the regime provided for in Article 210 A and occurring during the period referred to in the second sentence of the first paragraph, the fraction of the receivable that has not yet been charged off by the absorbed or transferring company is transferred to the company or companies benefiting from the contributions for its nominal value.
In the event of a demerger or partial contribution of assets, the claim is transferred in proportion to the actual net assets contributed to the company or companies receiving the contributions.
II. - The claim mentioned in the first paragraph of I is immediately repayable when it is established by one of the following companies:
1° Companies other than those mentioned in III of article 44 sexies and whose capital is fully paid up and at least 50% of which is held continuously:
a) By natural persons;
b) Or by a company at least 50% of whose capital is held by natural persons;
c) Or by venture capital companies, venture capital mutual funds, specialised professional funds covered by Article L. 214-37 of the Monetary and Financial Code as it stood prior to Order No. 2013-676 of 25 July 2013 amending the legal framework for asset management, professional private equity funds, sociétés de libre partenariat, regional development companies, financial innovation companies or single-member venture capital companies on condition that there is no arm's length relationship within the meaning of 12 of l'article 39 between the companies and these latter companies or these funds.
These companies may request the immediate repayment of the claim established in respect of the year of creation. The same applies to claims established in respect of the following four years;
2° Companies that have been the subject of conciliation or safeguard proceedings, receivership or compulsory liquidation. These companies may request reimbursement of their unused claim from the date of the decision or judgment that opened these proceedings;
3° Young innovative companies mentioned in article 44 sexies-0 A;
4° Companies that meet the definition of micro, small and medium-sized enterprises given in Annex I to Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty.
