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France Describes Declaration And Use Of CICE Tax Credit

by Ulrika Lomas, Tax-News.com, Brussels

20 January 2014


In a recent communiqué, the French Finance Ministry has clarified conditions for the declaration and use of the CICE tax credit for competitiveness and employment in 2014.

Instated under Article 66 of the third supplementary finance law for 2012, the CICE tax credit is designed to enable companies to reduce the cost of labor, for employees remunerated up to a threshold of 2.5 times the minimum wage.

The aim of the tax shelter is to increase the competitiveness of enterprises in France by promoting investment, research and innovation, training, recruitment, the exploration of new markets, an environmental and energy shift, and the recovery of working capital. According to the Finance Ministry, the CICE is a "powerful tool," providing tax relief to businesses amounting to around EUR20bn (USD27bn).

To benefit from the CICE tax credit, companies are required to file a specific CICE declaration (number 2079-CICE) in 2014. The form is now available on the Government's tax website.

Companies subject to corporation tax (IS) in France must submit the CICE declaration at the time their annual statement of tax liability is filed. This will be either the 15th day of the fourth month following the close of the financial year, or May 15 for those companies whose financial year ends on December 31, 2013. Specifically, a company closing its financial year on December 31, 2013, will be required to declare the CICE tax credit for 2013 by May 15, 2014, at the very latest.

Those businesses subject to income tax (IR) in France are to declare their CICE tax credit at the time they submit their declaration of results and tax return, namely the second working day following May 1. Furthermore, companies are required to report the tax credit amount in their income tax declaration (number 2042). In concrete terms, an individual company subject to IR is to declare the CICE 2013 in May 2014.

From January 2, 2014, companies will be able to submit their declarations via the Internet (number 2079-CICE-SD) using the online procedure (EDI-TDFC). Full information relating to the online service is available on the tax website under the heading "professionals."

The CICE tax credit is offset against corporation or income tax at the time of liquidation. Any CICE "surplus" may be carried forward over the next three financial years, and refunded thereafter if unused. Consequently, the CICE 2013 may be offset against the tax balance for the period 2013-2016, and any surplus refunded in 2017.

As an exception, the surplus tax credit is immediately refundable for SMEs, under certain circumstances, for example in the case of young innovative companies or start-up enterprises. These companies may request that the CICE 2013 tax credit be refunded from 2014.

TAGS: environment | Finance | tax | investment | business | energy | training | law | employees | corporation tax | professionals | France | tax breaks

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