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France: New French tax credit for competitiveness



Helene Rives and Simon Ginesty, Landwell & Associés

Many new regulations are under discussion in French Parliament which would significantly impact taxpayers. Nevertheless, a new credit has been introduced to improve the competitiveness of companies (CICE – Crédit d'impôt pour la compétitivité et l'emploi), which became effective as of January 1 2013.

This tax credit is available to most French and foreign enterprises subject to corporate or personal income tax regardless of their legal form or the nature of their activities.

It is calculated as a percentage of the wages paid during the calendar year to employees receiving less than 2.5 times the French minimum wage (the current gross monthly minimum wage is €1,430 ($1,933)). Initially the rate will be set at 4% for calendar year 2013 and will increase to 6% for 2014 and subsequent years.

The tax credit can be offset against the income tax liability payable by the taxpayer with respect to the calendar year during which the wages are paid. Any excess credit can be carried forward and offset against the tax liability of the taxpayer during the next three years. Any unused credit after three years will be refunded to the taxpayer.

Despite its apparent simplicity, the tax credit should be monitored by the beneficiaries since it may generate some accounting and transfer pricing questions, depending on the situation.

Helene Rives (

Landwell & Associés, Paris

Tel: +33 (0) 1 56 57 42 20

Simon Ginesty (

Landwell & Associés, Paris

Tel: +33 (0) 1 56 57 49 27

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