Accounting Standards Authority (ANC) has confirmed its position for the accounting records of the Territorial Economic Contribution (TEC) and Research Tax Credit (RIC) *:
1) Accounting for CET
The Economic Contribution Region or PST (which replaces the Business Tax / PT and is composed of CFE and the CVAE) is a tax to expense operating either in the accounts or consolidated accounts prepared in accordance with French regulations (see Regulations 99-02). However, for accounts prepared under IFRS (International Financial Reporting Standards), the accounting treatment of the ETC may be different (see IAS 12):
- land tax enterprise (CFE) is recognized in operating expense as was the business tax (so no distortion with the French accounting rules),
- contribution of value-added enterprises (CVAE), being based on the value-added the company to decide, given his situation, interpreting accounting policy. It may decide to treat CVAE as a tax on profits. If this happens, a deferred tax resulting from temporary differences on assets and liabilities of the balance sheet should be recorded.
2) Accounting CIR
But the ANC does not specify the accounting treatment to be used for the CIR in the consolidated financial statements prepared under French GAAP (see Regulations 99-02) ... thus leaving the question open.
Under IFRS, the research tax credit is considered a public subsidy therefore recognized as revenue (see IAS 20).
(*): See "Progress of the work group" Taxes and similar payments " January 2011 available on the website of the ANC ( www.anc.gouv.fr).
See also:
- "Young Innovative Companies (YIC) status and tax and social benefits"
- "The CET in Brief: declaration, amount, payment, rebates, exemption"
- Research and Innovation (CIR, JEI): updates to the Finance Act 2011 "
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