Question to an expert
Has the 25% tax reduction rate linked to SME capital investments been renewed for this year?
Individuals can benefit, under certain conditions, from an income tax reduction when they invest in the capital of small and medium-sized enterprises (SMEs) in the European Union. Since 2018, the legislator has renewed annually an increase in the rate of this reduction, from 18% to 25% of the payments made.
Since 1er January 2024, the government is strengthening the tax advantage in favor of SMEs qualified as “young innovative companies” (JEI) – SMEs less than eight years old considered, according to criteria strictly defined by law, as investing in research and development.
The rate of tax reduction for investment in these JEI amounts to 30% of subscriptions made between 1er January 2024 and December 31, 2028. It can even reach 50% if the JEI displays even more significant research and development expenditure.
The amount of the overall tax benefit resulting from this system cannot exceed 50,000 euros over the entire period between 2024 and 2028, without the possibility of carrying over any excess to a later financial year.
Investments in other SMEs, which do not qualify as JEI, remain eligible for the tax reduction at the non-reinforced rate of 18%. Namely: a Law proposition was tabled in the National Assembly by the opposition on January 23, to try to definitively increase this rate to 25%.