Need an investment in favor of risk financing greater than half of its average annual turnover for the previous 5 years, on the basis of a business plan drawn up with a view to entering a new geographic market or of products.
Note: companies benefiting from a temporary exemption from income tax are eligible for the IR-PME tax reduction.
If the subscription is made for the benefit of a host holding company, it must in addition:
- Has been established for at least 12 months on the date of subscription
- Has controlled a subsidiary for at least 12 months from the date of subscription
- And holds exclusively stakes in operational companies eligible for the IR-PME reduction
- Note: the coordinating holding company that does not meet these conditions cannot be assimilated to a passive holding company for the benefit of the IR-PME tax reduction
Subscriptions to the capital of non-coordinating holding companies
Here are the conditions to be met for a non-coordinating holding company to be eligible for the IR-PME tax reduction:
The 11 conditions presented above for operating companies must be satisfied with the exception of the conditions relating to the activity (condition n ° 7), to the period of exercise of the activity (condition n ° 11), to the minimum number of employees ( condition no.3), and the maximum amount of payments and aid (condition no.10).
- The exclusive purpose of the holding company is to hold shares in companies carrying out one of the eligible activities required for the operating company.
- The directors of the company are exclusively natural persons.
- The holding company is not already a partner or shareholder of the company in which it invests (except as part of a follow-up reinvestment).
- Finally, the holding company must send an information document to each investor before subscribing for its securities.
How is the IR-PME tax reduction calculated?
In this section, we explain how to determine the basis for calculating the tax reduction, what rate to apply to calculate it, as well as the overall cap on tax loopholes. You can make use of the tax return estimator for such calculator.
The basis for calculating the tax reduction
The basis for calculating the tax reduction is made up of the amount of payments made during the calendar year for eligible subscriptions to the device, as we mentioned in the previous section.
If the company which receives the payments is a non-coordinating holding company, the amount to be retained is proportional to the cash subscriptions to the initial capital or to the capital increases carried out by the holding in eligible companies.
Capping of payments used to calculate the tax reduction
The amount withheld for a calendar year is capped at:
- 100,000 euros for married or PACS couples subject to joint taxation.
- 50,000 euros for other taxpayers.
The fraction of payments that exceeds the annual ceiling gives entitlement to the tax reduction, calculated under the same conditions, over the following 4 years.
