Research tax credit reform: 30% of the volume of expenditure

Article 69 of the 2008 Finance Act reforms the research tax credit (Article 244 quater B of the General Tax Code). The credit is now calculated on the volume of research expenditure only; the incremental component and the €16 million cap are removed: 30% up to €100 million of expenditure and 5% above. The rate is raised to 50% in the first year and 40% in the second for a company that has not claimed it for five years and is not linked to a company that has. The cap on expenditure contracted to public research bodies rises from €10 million to €12 million. The reform applies to expenditure incurred from 1 January 2008.