Young growth companies, definition of economic performance indicators

Young growth companies, definition of economic performance indicators
Young growth companies, definition of economic performance indicators

The finance law for 2024 extended the tax reduction for subscription to the capital of SMEs to cash subscriptions made between 1er January 2024 and December 31, 2028 to the capital (law 2023-1322 of December 29, 2023, art. 48; see “Income tax” RF 1153, § 1681):

  • young innovative research companies (JEIR) (CGI art. 199 terdecies-0 A ter).

JECs are JEIs which carry out a lower percentage of research and development expenditure, but which meet the conditions to be qualified as companies with high growth potential (CGI art. 44 sexies-0 A, 3°.c).

The economic performance indicators (mentioned in c of 3° of article 44 sexies-0 A of the CGI) are satisfied when the company meets the following cumulative conditions, assessed at the close of the financial year (decree 2024-464 of May 24, 2024, OJ of 25;

  • its workforce (calculated according to the methods provided for in articles L. 1111-2, L. 1111-3 and L. 1251-54 of the labor code) has increased by at least 100% and by at least 10 employees in time equivalents full, compared to that observed at the close of the penultimate financial year;
  • the amount of its research expenses (mentioned in c of 3° of the same article 44 sexies-0 A) during this financial year has not decreased compared to that of the previous financial year.

The financial year is reduced or extended, where appropriate, to twelve months.

This decree comes into force on 1er June 2024.

The other eligibility criteria are defined by law and codified in article 44 sexies-0 A of the CGI.

Let us also remember that:

  • on a social level, young growth companies benefit from the same exemption from employer contributions as young innovative companies (see Dictionnaire Paye, “Young innovative companies”);
  • these companies can claim the benefit of an exemption from CFE (CGI art. 1466 D) and, subject to a decision by the competent authorities, an exemption from property tax on built properties (CGI art. 1383 D).
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