Spotlight on the 2024 Budget Law: C3IV, JEI, and Other Measures

Here we are! On December 30, 2023, French President Emmanuel Macron officially signed the 2024 Budget Act into law, formalizing numerous changes to the innovation ecosystem. Some measures have been widely discussed, and the back-and-forth in Parliament kept them shrouded in uncertainty right up until the end. Few measures from the text initially presented remain unchanged. 

Table of Contents

I. The Green Industry Investment Tax Credit: Making France a Global Leader

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II. Reforming the JEI: Supporting Investment and Growth in Startups and Innovative SMEs

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III. Other measures, either confirmed or repealed during the legislative process

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IV. The Dynergie Strategy

The Green Industry Investment Tax Credit: Making France a Global Leader

Stemming from the Green Industry Act introduced by the government last spring, the Green Industry Investment Tax Credit ( , or C3IV) will help finance productive investments for companies across the entire value chain for batteries, wind power, heat pumps, and photovoltaics. 

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Officially authorized on January 8, 2024, by the European Commission under Article 2.8 of the “Temporary Crisis and Transition Framework” of March 17, 2023, aimed at stimulating the deployment of green energy across Europe, this tax credit operates on the same principle as the video game tax credit: companies must obtain approval from the authorities in order to have their projects funded. The final rate will depend on the size of the company as well as its geographic location, ranging from 20% to 40% in general and up to 45% in the most favorable cases.

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💡 Although the Senate had expanded the scope of the Finance Bill during its first reading to include the electrolyzer (for hydrogen) and carbon capture and storage (CCUS) sectors, the National Assembly’s Finance Committee decided to remove them from the C3IV in order to fund them, starting in 2024, through the France 2030 program.

The JEI Reform: Supporting Investment and Growth in Startups and Innovative SMEs

Conceived and recommended by the Midy Report to support investment in startups, innovative SMEs, and growth-oriented SMEs, the reform of the JEI status has finally introduced a new category: the Young Growth Enterprise (JEC) status. This new status will allow young companies that spend between 5% and 15% of their budget on research to benefit from the advantages of JEI status, provided they meet specific performance indicators regarding their growth. 

The new Finance Act also allows public procurement to support JEICs: public entities (hospitals, government departments, local authorities, public companies, etc.) will be able to make purchases of up to €100,000 from JEICs without a competitive bidding process and through a simplified procedure. 

Finally, tax incentives for individuals are being introduced with the aim of encouraging savings and directing them toward the ecosystem of innovative companies. However, new companies established after January 1, 2024, that participate in the program will no longer be eligible for the corporate tax exemption, a measure deemed to be of limited benefit.

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Further reading on this topic: Reform of the JEI status in the 2024 Finance Act: what remains of the Midy report?

Other measures, which were either confirmed or repealed during the legislative process

• Introduction of measures under the anti-fraud law, aimed at effectively combating social security and tax fraud. With regard to the latter, the focus is on combating abusive tax planning, as well as on providing better tax support to businesses, recognizing the right to make mistakes for businesses, and penalizing companies that encourage tax fraud.

💡 Under this law, more than 1,500 full-time equivalent (FTE) positions are being funded to combat tax fraud and assist businesses with their tax matters. The stated goal is to systematize the use of advance rulings to ensure the accuracy of companies’ tax returns and prevent potential errors early on (particularly regarding JEI status and tax incentives such as the Research Tax Credit and the Innovation Tax Credit).

• Removal of the Senate’s amendments regarding the Innovation Tax Credit, maintaining the cap on the eligible tax base at 400,000 euros and extending the program’s duration through December 31, 2024.

💡 Following the removal of the provisions from the Midy report during the first reading, the Senate simultaneously proposed doubling the ceiling on the eligible tax base (from €400,000 to €800,000) and extending the measure through December 31, 2026. The Finance Committee, in removing these provisions, announced that it would address the issue in the next Finance Bill for the year 2025.

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• Extension of the Video Game Tax Credit through December 31, 2026.

• No changes to the Research Tax Credit or the IPBox.

💡 A reform of the CIR is expected to be included in the next Finance Bill to maximize its effectiveness, as is a reform of the IPBox (likely through a cap on the eligible tax base), given the government’s need to generate €12 billion in savings in the next Finance Bill.

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Further reading on this topic: CIR Reform: An Analysis of Expected Changes

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• A €1.6 billion increase in funding allocated to the France 2030 program

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💡 With a budget of €6.09 billion in 2023, the France 2030 program has seen its funding increase by €1.6 billion, bringing the total funding for 2024 to €7.7 billion. All of these funds are allocated as payment appropriations (CP).

The Dynergie Strategy

Given the changes introduced by this Finance Act—whether it be the C3IV or the measures in the anti-fraud law—our experts, who are recognized by the tax authorities, will provide you with the best possible support to ensure the accuracy of your tax returns and help you maximize your tax benefits (JEI, CIR, CII, etc.).