01 — Tax regime
Is your company subject to French corporation tax?
The regime taxes certain income at 10% instead of the standard rate. It therefore assumes a company within the corporation tax net, showing a taxable result on the asset concerned.
Method
The 6 criteria we check
Each question below maps to a real condition of the IP Box scheme. Here is what it tests, and why it decides the outcome.
02 — Type of asset
Do you hold one of these assets?
Software protected by copyright, a patent, an industrial manufacturing process, or a plant variety certificate.
The list is closed. The least understood entry is software: it qualifies through copyright alone, with no patent required. Many software companies assume they are excluded when in fact they sit squarely inside the regime.
03 — Source of income
Do you earn income from that asset?
Licences, subscriptions, royalties from licensing or sub-licensing, or proceeds of a sale.
The regime applies to net income from the asset, not to the asset itself. Software used internally, with no identifiable income, gives no access to the reduced rate. Where the software is bundled into a larger offer, the share of revenue attributable to it has to be separable, which is doable but has to be prepared.
04 — Where it was built
Was the asset developed through work carried out in France?
The regime rewards research done in France. A ratio, the nexus ratio, measures the French share of R&D spending against the total: only the matching fraction of income gets the reduced rate.
05 — In-house or intra-group
Was the work done by your own teams, or by other companies in your group?
This sets the size of the benefit. Spending done in-house or with unconnected third parties gets a 30% uplift in the ratio. Spending with related companies counts in the denominator without that uplift, which cuts the share of income taxed at 10%.
06 — Tracing the spending
Can you trace, from the start, what you spent on this asset?
The ratio is cumulative from the creation of the asset and is recalculated every year. This is the real difficulty of the regime, and it is a record-keeping problem rather than a conceptual one. The history can be reconstructed, and doing so is often the first job of the engagement.