Creation of young innovative company status: exemptions from profit tax, local taxes and employer contributions

Article 13 of the 2004 Finance Act creates the young innovative company status (Article 44 sexies-0 A of the General Tax Code): SMEs under eight years old whose research spending is at least 15% of their costs and at least 50% owned by individuals or similar. These companies are exempt from profit tax for their first three profitable years, then taxed on half their profits for the next two (Article 44 sexies A), exempt from the annual flat-rate tax, and local authorities may exempt them from property tax and business tax for seven years. Article 131 exempts the pay of researchers, technicians and research staff from employer social security contributions until the seventh year after creation. The scheme applies to companies created up to 31 December 2013, within the limits of the EU de minimis regulation.