WORLD TRADE  
ORGANIZATION  G/SCM/N/186/EEC/Add.9 
23 December 2009 
 
 (09-6552) 
Committee on Subsidies and 
Countervailing Measures Original:   French 
 
 
 
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1 of the GATT 1994  
and Article 25 of the Agreement on Subsidies and  
Countervailing Measures  
 
EUROPEAN COMMUNITIES 
 
Addendum  
 
 The following addendum to the notification of the European Community∗ relates to the 
subsidy programmes of France . 
 
_______________ 
 
                                                      
∗ On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on European Union and the Treaty 
establishing the European Community (done at Lisbon, 13 December 2007) entered into force.  On 
29 November 2009, the WTO received a Verbal Note (WT/L/779) from the Council of the Eu ropean Union and 
the Commission of the European Communities stating that, by virtue of the Treaty of Lisbon, as of 
1 December 2009, the European Union replaces and succeeds the European Community. G/SCM/N/186/EEC/Add.9 
Page 2  
 
  FRANCE 
 
Table of contents  
 
Page 
 
I. SME SCHEMES .................................................................................................................... ...3 
A. REGIONAL PREMIUM FOR THE CREATION OF ENTERPRISES (PRCE)..........................................3  
B. REGIONAL EMPLOYMENT PREMIUM (PRE) ................................................................................4  
C. REGIONAL ADVISORY ASSISTANCE FUND (FRAC)....................................................................5  
D. SME-SMI  DEVELOPMENT FUND ................................................................................................6  
II. REGIONAL SCHEMES ..........................................................................................................8  
A. METROPOLITAN FRANCE ............................................................................................................8  
B. CORSICA ............................................................................................................................... .....12  
C. FRENCH OVERSEAS DEPARTMENTS (FOD) ..............................................................................16  
D. URBAN AREAS IN DIFFICULTY ..................................................................................................23  
III. R&D SCHEMES.................................................................................................................... .25 
A. TAX CREDIT TO PROMOTE RESEARCH ......................................................................................25  
B. NATIONAL RESEARCH AGENCY (ANR)....................................................................................26  
C. INDUSTRIAL INNOVATION FUND (FII) ......................................................................................28  
D. FUND FOR ENTERPRISE COMPETITIVENESS (FCE)....................................................................29  
E. NATIONAL AGENCY FOR THE PROMOTION OF RESEARCH (ANVAR) ......................................30  
F. OSEO  INNOVATION AID SCHEME FOR RESEARCH , DEVELOPMENT AND INNOVATION 
(RDI).......................................................................................................................... ...............32  
G. INDUSTRIAL INNOVATION AGENCY AID FOR INDUSTRIAL INNOVATION PROMOTION 
PROGRAMMES (PMII) ...............................................................................................................33  
H. AID TO RESEARCH INSTITUTIONS IN THE CIVIL AVIATION SECTOR .........................................34  
I. CIVIL AVIATION RESEARCH ......................................................................................................35  
J. YOUNG INNOVATIVE ENTERPRISES (JEI)..................................................................................36  
IV. SECTORAL REGIME...........................................................................................................37  
A. TONNAGE -BASED TAX SCHEME ...............................................................................................37  
 
  G/SCM/N/186/EEC/Add.9 
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  I. SME SCHEMES 
A. REGIONAL PREMIUM FOR THE CREATION OF ENTERPRISES (PRCE) 
1. Period covered by the notification  
 2007 and 2008. 
 
2. Policy objective of aid scheme  
 Job creation and ec onomic development. 
 3. Legal basis
 
 Article L.1511-2 of the General Code on Local Authorities. 
 
4. Form of the aid  
 Business grant with a ceiling of €25,000, but which may be increased to €35,000 in priority 
areas defined by decision of the Regional Council.  
5. Beneficiaries of the aid and allocation mechanism
 
Beneficiaries  
 
 Enterprises created less than 12 months prior to submission of the application. 
  Allocation mechanism
 
 
 The premium is paid directly to the enterpri ses by the local authorities and in particular the 
regions, which are responsible for th e implementation of this scheme. 
  Conditions
 
 
 Enterprises must undertake to create a minimum number of permanent jobs by recruiting 
persons linked to the enterprise by open-ended employment contracts. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 2007:  €33 million 
 2008:  €33 million  7. Duration of the subsidy and/or any other time-limits attached to it
 
 Provision applicable indefinitely. 
 
8. Statistical data permitting an assessment of the trade effects of the subsidy  
 No precise data can be provided.  However, since the total amount of aid granted annually 
and the maximum amount of aid that can be gran ted to each enterprise are low, the scheme has no 
significant impact on trade.  G/SCM/N/186/EEC/Add.9 
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  B. R
EGIONAL EMPLOYMENT PREMIUM (PRE) 
1. Period covered by the notification  
 2007 and 2008. 
 2. Policy objective of aid scheme
 
 Job creation and ec onomic development. 
 3. Legal basis
 
 Article L.1511-2 of the General Code on Local Authorities. 
 
4. Form of the aid  
 Business grant with a ceiling of €11,000 per j ob over three years, up to a total annual amount 
of €160,000 per enterprise.  5. Beneficiaries of the aid and allocation mechanism
 
Beneficiaries  
 
 Small and medium-sized enterprises, with the exception of those operating in the following 
sectors:  the coal industry, transport, iron and steel industry, shipbuilding, synthetic fibres, 
automotive industry and financial services. 
 
 Allocation mechanism  
  The premium is paid directly to the enterpri ses by the local authorities and in particular the 
regions, which are responsible for th e implementation of this scheme. 
 
 Conditions
 
  As a general rule (job creation as the result of  the recruitment of a person linked to the 
enterprise by an open-ended employment contract), the aid amounts to a maximum of 20 per cent of gross earnings, subject to the payment of social security contributions for the new 
employee for three years. 
 
 The enterprise must create one or more jobs, unrelated to any new investment, and not have 
dismissed or made redundant any staff in the 12 months prior to submitting the application. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 2007:  €43 million 
 2008:  €43 million  7. Duration of the subsidy and/or any other time-limits attached to it
 
 Ten years from 2000. 
  G/SCM/N/186/EEC/Add.9 
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  8. Statistical data permitting an assessment of the trade effects of the subsidy  
 No precise data can be provided.  However, since the total amount of aid granted annually 
and the maximum amount of aid that can be gran ted to each enterprise are low, the scheme has no 
significant impact on trade.  
C. R
EGIONAL ADVISORY ASSISTANCE FUND (FRAC) 
1. Period covered by the notification  
 2007 and 2008. 
 2. General policy objective and/or purpos e of the subsidy (or aid scheme
) 
 To promote the development of SMIs by encour aging them to call on outside consultants, and 
to internationalize certain advisory functions yet to be created (recruitment of professional staff). 
 3. Legal basis (reference, date
) 
 Authorization by the Commission on 5 January 2000.  Ministerial Circular of 3 August 1989 
on arrangements for the use of decentralized loans for the environment and enterprise 
competitiveness.  4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Direct subsidization of the enterprise as regards: 
 
 - Recourse to consultants by enterprises with  inadequate internal operational services 
(FRAC); 
  - recourse to technical advice provided by public or private laboratories, research 
centres, etc:  Regional Technology Transfer Assistance Fund (FRATT); 
 
 - internal advisory service involving the creation of new professional posts within the 
enterprise:  Professional Staff Recruitment Assistance (ARC). 
 5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
).  
Beneficiaries (who receives the subsidy, the producer, the exporter, other ) 
 SMEs from all sectors, in accordan ce with specific support criteria. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Total amount for 2007:  €22.54 million. 
 Total amount for 2008:  not available at 30 April 2009. 
 G/SCM/N/186/EEC/Add.9 
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  Maximum level of aid: 
 
TYPE OF ADVICE LEVEL  
"FRAC (short)" €3,800, up to a maximum of 80% of 
consultancy fees. With the exception of the ECSC, 
shipbuilding, synthetic fibres, automobile manufacturing, fisheries 
and agricultural sectors. 
"FRAC" €30,500, up to a maximum of 50% of the 
cost of the advisory service provided or 
the salary, including social security 
contributions, of the newly appointed employee.  
 
7. Duration of the subsidy and/or any other time-limits attached to it  
 Permanent arrangement funded on a yearly basis under the Finance Law. 
 
8. Statistical data permitting an assessment of the trade effects of the subsidy  
 Given that the purpose of the programme is to improve enterprise management, it has no 
impact on production costs and consequently does not affect trade.  D. SME-SMI
 DEVELOPMENT FUND 
1. Period covered by the notification  
 2007 and 2008. 
 2. General policy objective and/or purpos e of the subsidy (or aid scheme
) 
 Assistance to SMEs for their technological a nd innovative material investments, intangible 
investments, installation and organizational work a nd studies relating to such material investments. 
 3. Legal basis (reference, date
) 
 Circular of 31 August 2000. 
  Programme contracts between the State and the regions. 
 
 Notification by the French authorities on 1 March 2000.   Authorization by the Commission on 5 July 2000.  
4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Subsidy. 
  G/SCM/N/186/EEC/Add.9 
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  5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions)  
Beneficiaries (who receives the subsidy, the producer, the exporter, other)  
 
• Financially sound enterprises that come within the EU definition of SMEs, 
i.e. enterprises: 
 
• employing no more than 250 persons; 
 
• no more than 25 per cent of the equity or voting rights of which are held by one or 
more enterprises which fail to meet the above  criteria.  Shares held by public holding 
companies, companies with venture capital and, provided they do not exercise any 
control, institutional investors, are not taken into consideration. 
 
 Conditions 
 
 The maximum rate of contribution is as follows: 
 
Type of area Small enterprise Medium-sized 
enterprise 
Unassisted area 15% gross 7.5% gross 
Assisted area/PAT, 11.5 % gross 21.5% gross  
Assisted area/PAT, 17% 27% gross  
Assisted area/PAT area, 23% gross 33% gross, up to a ceiling of 30% net  
Assisted area/FOD, 65% net 75% net  
 
6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
• Total amount for 2007:  €11.19 million. 
• total amount for 2008:  not available at 30 April 2009. 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 The scheme is valid until 2006.  Renewal in 2007. 
 
8. Statistical data permitting an assessment of the trade effects of the subsidy  
 The aid is intended to compensate for struct ural disadvantages associated with the size of 
small enterprises.  It has no effect on trade.  G/SCM/N/186/EEC/Add.9 
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  II. REGIONAL SCHEMES 
A. M
ETROPOLITAN FRANCE  
2.1.1 Tax reduction for new enterprises 
 
1. Title of the aid scheme  
 Profits tax exemption for new enterprises set up in regional aid zones, rural revitalization 
areas and urban redevelopment areas.  2. Period covered by the notification
 
 2007 and 2008. 
 
3. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 To promote the creation of new enterprises in areas with geographical, economic or social 
disadvantages.  
4. Legal basis (reference, date
) 
 Article 44 sexies  of the General Taxation Code, deriving from Article 14A of 
Law No. 88-1149 of 23 December 1988, extende d by Article 92-I of Law No. 99-1172 of 
30 December 1999 and then by Article 92 of La w No. 2003-1311 of 30 December 2003, and amended 
by Article 87 of the Amending Finance Law for 2006 No. 2006-1771 of 30 December 2006 and 
Article 45 of the Amending Finance Law fo r 2007 No. 2007-1824 of 25 December 2007. 
 
5. Form of the subsidy (i.e. grant, loan, tax concession, etc. ) 
 Tax concession.  Exemption from profits tax for two years, followed by a reduction for profits 
earned over the next three years (75 per cent, th en 50 per cent, then 25 per cent).  However, 
enterprises which set up in rural revitalization areas between 1 January 2004 and 31 December 2009 
are eligible for exemption from profits tax for five  years, followed by a reduction for profits earned 
over the next nine years (60 per cent in the first five  years, 40 per cent in th e sixth and seventh years, 
and 20 per cent in the eighth and nine years).   This tax benefit may on no account exceed €225,000 over a 36-month period for accounting 
periods closed by 31 December 2006.  For accounting periods closed as of 1 January 2007, eligibility 
for the benefit is subject to compliance with Commission Regulation (EC) No. 1998/2006 of 
15 December 2006 on de minimis  aid. 
 6. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  New 
enterprises in the legal and economic sense (excluding resumption, merging, 
restructuring, and extension of pre-existing activities), at least 50 per cent of the share capital of which is held by natural persons, and which are set up in specified areas. 
  - Allocation mechanism :  By operation of law. 
 
 - Conditions :  Genuinely new enterprises set up in  eligible areas and the headquarters 
and all activities and operating resources of which are established in that area.   G/SCM/N/186/EEC/Add.9 
 Page 9 
 
 
  However, in the case of ente rprises exercising a non-sedenta ry activity, conditions of 
establishment are considered to  have been met if turnover generated outside eligible 
areas does not exceed 15 per cent (above this threshold, profits are taxed but on the basis of turnover generated outside such areas). 
 
7. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Total amount for 2007:  €125 million. 
 Average subsidy per unit:  around €2,800 in 2007.  
8. Duration of the subsidy and/or any other time-limits attached to it
 
 Five years (or 14 years for enterpri ses created between 1 January 2004 and 
31 December 2009 in rural revitalization areas), th e scheme being applicable to enterprises set up 
until 31 December 2009.  
9. Statistical data permitting an assessment of the trade effects of the subsidy
 
 Around 45,000 beneficiaries in 2007. 
 
2.1.2 Land-Use Management Premium (PAT) 
 
1. Period covered by the notification  
 2007 and 2008. 
 2. General policy objective and/or purpos e of the subsidy (or aid scheme
) 
 Development of employment-generating activiti es in the regional aid zones, and development 
of R&D activities throughout the territory. 
 
3. Legal basis (reference, date ) 
 Decree No. 2001-312 of 11 April 2001 
 Decree No. 2007-908 of 11 May 2007  Decree No. 2007-1029 of 15 June 2007  
4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Subsidy. 
 5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
- Beneficiaries :  Enterprises which manufacture products directly related to the 
processing of a natural or semi-finished product, provide business services or 
undertake R&D programmes. 
 
 - Allocation mechanism :  Decision by the Minister for Town and Country Planning. 
  - Conditions :  Projects assisted with industry and services PATs must lead, over a 
period of three years, to the creation of more than 25 permanent-contract jobs and 
investment of €5 million, or to 50 perman ent-contract jobs.  Projects supported by G/SCM/N/186/EEC/Add.9 
Page 10  
 
  RDI PATs must lead to the creation of 20 permanent-contract jobs or to €7.5 million 
of eligible expenditure. 
 6. Total annual amount
 
 2007:  €44.77 million. 
 2008:  €40.88 million. 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 General scheme valid until 31 December 2013. 
 
8. Statistical data permitting an assessment of the trade effects of the subsidy  
 2007 2008 
Number of jobs assisted 9,748 8,255 
Investments assisted €2,028 million €1,100 million 
 
 
2.1.3 Mining conversion programme (SOFIREM - FINORPA) 
 
1. Period covered by the notification  
 2007 and 2008. 
 
2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 To assist the conversion of areas affected by the restructuring of the mining industry. 
 3. Legal basis (reference, date
) 
 Commission Decision NN 2/89 of 15 June 1989 concerning the Charbonnages de France 
conversion companies. 
 4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Long-term soft loans without a security requ irement.  These loans may always be repaid 
before the due date and redeem ed without penalty (maximum financing:  30 per cent of the 
investment). 
 
 Acquisition of minority holdings.   Provision of free advice and services to the beneficiaries (SMEs) of the above measures.  
5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Enterprises in the coal-mining areas (as recognized by the Commission). 
  - Allocation mechanism :  Two to three per cent below the normal rate with a variable 
period of repayment. 
  G/SCM/N/186/EEC/Add.9 
 Page 11 
 
 
    In zones covered by SOFIREM and FI NORPA that are included in the zones 
qualifying for a land-use management premium (PAT), the aid component is incorporated into the total regional aid an ticipated for a given project in order to 
ensure that the regional aid ceilings impo sed under the PAT scheme are respected.  In 
zones covered by SOFIREM and FINORPA that are not included in the zones 
qualifying for the PAT, only SMEs are eligible for the measures. 
  - Conditions :  All enterprises in the coal-min ing area may apply under the same 
conditions. 
 
6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 No funding since 1996 . 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
8. Statistical data permitting an assessment of the trade effects of the subsidy  
 The aid is intended to compensate for the disa dvantages associated with establishment in the 
areas in question (lack of qualified subcontracti ng personnel, distance from markets and suppliers, 
etc).  Consequently, it has no effect on trade.  
2.1.4 Industrial Development Company (SODIE) 
 
1. Period covered by the notification
 
 2007 and 2008. 
 2. General policy objective and/or purpos e of the subsidy (or aid scheme
) 
 Reindustrialization and diversification in  areas affected by industrial decline. 
 3. Legal basis (reference, date
) 
 Initial approval on 17 February 1988 for conve rsion companies, on condition that the aid 
component of their activities is incorporated in th e overall regional aid package for a given project in 
order to ensure that the ceilings im posed under the PAT scheme are respected. 
 
 Letter from the Commission dated 13 February 1995 for funding during the 1993 financial 
year.   Aid Number :  No. 762/94. 
 
 As of 1 January 1993, the five conversion companies of the USINOR-SACILOR group merged to form a single entity, Société pour le Développement de  l'Industrie et de l'Emploi  (SODIE), 
comprising the following companies:  SODINOR, SODINOR VNE, SODIKERQUE, SODIKERQUE LITTOTAL, SODIEST, SODICEM, and SOCADEV.  
4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 The loans may not be cancelled.  Subsidies gr anted for the redeployment of iron and steel 
workers are not financed by State funds, but by the USINOR-SACILOR iron and steel group. G/SCM/N/186/EEC/Add.9 
Page 12  
 
   
5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
 Enterprises established in the iron and steel conversion areas. 
 
 - Allocation mechanism  
  - Conditions :  Zones of operation to be defined in agreement with the Commission. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 SODIE has not received State funding since 1996 . 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 Variable. 
 
8. Statistical data permitting an assessment of the trade effects of the subsidy  
 The aid is intended to compensate for the disa dvantages associated with establishment in the 
areas in question (lack of qualified subcontracti ng personnel, distance from markets and suppliers, 
etc.).  Consequently it has no effect on trade.  
B. C
ORSICA  
2.2.1 Exemption, subject to approval, from corporation tax on profits resulting from new 
activities created in Corsica 
 
1. Period covered by the notification  
2007. 
 2. General policy objective and/or purpos e of the subsidy (or aid scheme
) 
 To promote job creation and ec onomic development in Corsica. 
 3. Legal basis (reference, date
) 
 Article 208 quater  A of the General Taxation Code , deriving from Article 88 of Law 
No. 90-1168 of 29 December 1990, last amended by Article 4-I of Law No. 94-1131 of 27 December 1994.  4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Tax concession.  Exemption from profits tax for a period of 96 months. 
 5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Companies subject to corporation tax on new activities launched in Corsica before 
1 January 1999 in the industrial, crafts , construction and agricultural sectors.  G/SCM/N/186/EEC/Add.9 
 Page 13 
 
 
   
 - Allocation mechanism :  Approval. 
  - Conditions :  Subject to approval. 
 
6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Total amount for 2007:  Under €500,000. 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 Eight years;  the scheme closed on 1 January 1999. 
 8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 Not available. 
 2.2.2 Tax exemption for profits realized by en terprises set up in Corsica in the crafts, 
industrial, hotel, constructi on and public works sectors 
 
1. Period covered by the notification
 
2007. 
 
2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 To encourage the creation of new enterprises in Corsica. 
 3. Legal basis (reference, date
) 
 Article 208 sexies  of the General Taxation Code , deriving from Article 22 of 
Law No. 87-1061 of 30 December 1987, last amende d by Article 4-II and -III of Law No. 94-1131 of 
27 December 1994.  4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Tax concession.  Exemption from profits tax for a period of 96 months. 
 
5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions ) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Companies subject to corporation tax and established in Corsica before 
1 January 1999. 
 
 - Allocation mechanism :  By operation of law. 
  - Conditions :  The enterprises must conduct a ll their business in Corsica. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Total amount for 2007:  under €500,000. G/SCM/N/186/EEC/Add.9 
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7. Duration of the subsidy and/or any other time-limits attached to it
 
 Eight years;  the scheme closed on 1 January 1999. 
 8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 Not available. 
 
2.2.3 Profits tax exemption for industrial, commercial, crafts and agricultural enterprises 
operating in Corsica on 1 January 1997 or which establish operations there between this 
date and 31 December 2001 ( Zone franche Corse ) 
 
1. Period covered by the notification  
 2007 and 2008. 
 2. General policy objective and/or purpos e of the subsidy (or aid scheme
) 
 To promote the creation and maintenance of operations in Corsica. 
 3. Legal basis (reference, date
) 
 Article 44 decies  of the General Taxation Code, deri ving from Article 1 of Law No. 96-1143 
of 26 December 1996 and amended by Article 1 of Law No. 98-1266 of 30 December 1998 and 
Article 33 I 1º a and b of Law No. 2003-721 of 1 August 2003. 
 
4. Form of the subsidy (i.e. grant, loan, tax concession, etc. ) 
 Tax concession.  Reduction on taxable profits up to a ceiling of €61,000 per 12-month period.  
Reduction of 100 per cent for the first five years of  operation, then 80 per cent, 60 per cent, 40 per 
cent and 20 per cent for each of the four subsequent 12-month periods. 
 
5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions ) 
- Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Commercial, crafts, liberal-professional and ag ricultural enterprises, for their new or 
existing activities established in Corsica. 
 
 - Allocation mechanism :  By operation of law. 
  - Conditions :  Enterprises must possess operating resources in Corsica enabling them 
to conduct their operations there autonomously. 
 
6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
• Total amount for 2007:  €6 million. 
• Average amount of the subsidy per unit:  around €4,300. 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 Five years (+ four years of degressive reduction);  the scheme closed on 31 December 2001.  G/SCM/N/186/EEC/Add.9 
 Page 15 
 
 
   
8. Statistical data permitting an assessment of the trade effects of the subsidy  
 Not available. 
 
2.2.4 Tax credit for certain investment s made and exploited in Corsica 
 
1. Period covered by the notification  
 2007 and 2008. 
 2. General policy objective and/or purpos e of the subsidy (or aid scheme
) 
 To promote investment in Corsica. 
 3. Legal basis (reference, date
) 
 Article 244 quater  E of the General Taxation Code, deriving from Article 48 of Law 
No. 2002-92 of 22 January 2002 on Corsica, ame nded by Article 41 of the Amending Finance Law 
for 2002 (Law No. 2002-1576 of 30 December 2002), Article 33 of Law No. 2003-721 of 
1 August 2003 on Economic Initiative and Article 87-IX of the Amending Finance Law for 2006 
No. 2006-1771 of 30 December 2006.  4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Tax concession.  Tax credit equivalent to 20 per cent of investment costs. 
 
5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions ) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Small and medium-sized industrial, comme rcial, crafts, liberal-professional and 
agricultural enterprises est ablished in Corsica. 
 
 - Allocation mechanism :  Upon option by the enterprise. 
  - Conditions :  Investments eligible for tax credit ar e those used in Corsica, other than 
replacement investments, and at least 25 per cent of which is financed without State aid.  Investments made in certain  sectors of activity subject to Community 
constraints are excluded.  Eligible investments must be used in Corsica for at least 
five years. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
• Total amount of tax credit in 2007, 2008 and 2009 = €15 million, disbursements in 
2008 re-assessed at €18 million on the basi s of the 2008 annual performance reports; 
 
• average amount of the subsidy per unit:  €6,000. 
 
7. Duration of the subsidy and/or any other time-limits attached to it  
 This aid scheme applies to investments made between 1 January 2002 and 
31 December 2011. G/SCM/N/186/EEC/Add.9 
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8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 Not available. 
 C. F
RENCH OVERSEAS DEPARTMENTS (FOD) 
2.3.1 Long-term tax treatment in French Overseas Departments 
 
1. Period covered by the notification  
 2007 and 2008. 
 
2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 To contribute to the promotion of the Over seas Departments and,  more generally, to 
encourage their economic development.  3. Legal basis (reference, date
) 
 Article 1655 bis of the General Taxation Code, deri ving from Decree No. 58-558 of 
28 June 1958 and last amended by Article  44 of Law No. 96-1182 of 30 December 1996. 
 4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Tax concession.  This arrangement mainly involves exemption from corporation tax on 
reinvested profits and from import and export duti es and fees on certain products.  This scheme may 
not be applied concurrently, except with regard to  mining companies operating in the department of 
Guyana, with the exemption arrange ments provided for under Article 208 quater  of the General 
Taxation Code.  5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Public limited companies, partnerships lim ited by share capital, and limited liability 
companies the purpose of which is research and mining in the Overseas Departments;  public limited companies, limited liability partnerships and limited liability companies with agricultural, forestry or industrial activities in the department of 
Guyana;  and companies the sole purpose of  which is to conduct industrial activities 
in the departments of Guadeloupe, Martini que and Reunion comprising an investment 
programme for a minimum of F 20 million (€3,048,980.30). 
  - Allocation mechanism :  Prior approval by the Minister of the Economy, Finance and 
Industry. 
 
 - Conditions :  See above. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
• Total amount for 2007 and 2008:  under €500,000. 
  G/SCM/N/186/EEC/Add.9 
 Page 17 
 
 
  7. Duration of the subsidy and/or any other time-limits attached to it  
 The duration of the subsidy is specified in th e authorization for each particular case and is 
limited to a maximum of 25 years, plus, where appropriate, installation time not exceeding five years.  It applied to companies that had submitted an application for authorization prior to 
31 December 2001. 
 
 The subsidy has not been extended.  8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 No company requested an authorization in 1996 or 1997. 
 
 Six authorizations were granted to mining companies in 1998 and 1999.   No authorizations were granted in 2000.  
 Two authorizations were granted in 2001. 
 
2.3.2 VAT deduction for certain exempted products 
 
1. Period covered by the notification
 
 2007 and 2008. 
 
2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 To promote economic development in Overseas Departments, preventing products exempted 
from VAT from being taxed following their incorporation into a production process.  
3. Legal basis (reference, date
) 
 Ministerial Decision of 2 November 1953. 
 4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Tax concession.  Deduction of VAT  on certain exempted products. 
 
5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions ) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Enterprises subject to VAT established in the Overseas Departments of Guadeloupe, 
Martinique and Reunion. 
 
 - Allocation mechanism :  Deduction of uncollected VAT. 
  - Conditions :  The deduction of uncollected VAT  takes place following the import or 
purchase of certain exempted products. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
• Total amount for 2007:  €200 million. G/SCM/N/186/EEC/Add.9 
Page 18  
 
   
• Total amount for 2008:  €225 million. 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 Permanent scheme. 
 
8. Statistical data permitting an assessment of the trade effects of the subsidy  
 Not available. 
 
2.3.3 Deduction of investments in F rench Overseas Departments and Territories 
 1. Period covered by the notification
 
 2007 and 2008. 
 2. General policy objective and/or purpos e of the subsidy (or aid scheme
) 
 To contribute to the economic development of  French Overseas Departments and Territories. 
 
3. Legal basis (reference, date ) 
 Initially codified under Articles 238 bis HA and 238 bis HC of the General Taxation Code, 
deriving from Article 22 of Finance Law No. 86-824 of 11 July 1986, this scheme, which has been amended several times, is now codified under Articles 199 undecies  B, 217 undecies  and 217 duodecies  
of the said Code. 
 
 This scheme was established under Law No. 2003-660 of 21 July 2003.  4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Tax concession.  Deduction of the amount of elig ible investment from the profits subject to 
corporation tax, or a tax reduc tion for taxpaying natural persons. 
 5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Enterprises and partners in a company subject to the tax regime provided for in Article 8 of the General Taxation Code (partnerships) or members of a grouping 
referred to in Article 239 quater  or 239 quater  C of the same Code (economic interest 
groupings) which make productive investments overseas intended for use in certain sectors of activity, or, solely in respect of enterprises subject to corporation tax, 
which subscribe in cash for sh ares in companies subject to corporation tax that invest 
overseas in those sectors or for shares in regional development companies in the 
Overseas Departments. 
  - Allocation mechanism :  Prior authorization must be obtained for eligible 
investments in excess of €300,000 or €1 million, depending on the type of financing arrangements.  Authorization is automatic for investments below these amounts, with 
the exception of investment in the followi ng:  the transport, recreational boating, 
agriculture, sea fishing and aquaculture sectors, the coal and iron and steel industries, the shipbuilding or synthetic fibre sectors and the automotive industry;  investment in  G/SCM/N/186/EEC/Add.9 
 Page 19 
 
 
  relation to the restoration and rehabilitation of graded hotels, tourist accommodation 
and holiday villages or in  failing businesses, or investment required for the 
exploitation of a concession for local public  services of an industrial or commercial 
nature;  such investments, without exception,  require authorization as of the first euro. 
 
 - Conditions :  Fixed assets, which must be tangi ble, new and redeemable, must be 
acquired, created, or leased by an enterprise engaged in agricultural, industrial, commercial or crafts activities outside the follo wing sectors:  trade;  catering, with the 
exception of graded tourist restaurants, cafés, tobacconists and bars/public houses;  business advisory services and consultancy;  research and development;  education, 
health and social welfare;  banking, finance and insurance;  all real estate activities;  
the cruise industry, rental/leasing services without operators, with the exception of the rental of motor vehicles and pleasure boats, car repair;  business services, with the exception of maintenance, cleaning, packag ing on a toll basis and call centres;  
leisure, sporting and cultural activities, ex cept, on the one hand, activities which are a 
direct and key component of hotel or tourism activities and which do not involve 
games of chance or gambling and, on the other hand, audiovisual and cinematographic production and broadcasti ng;  associative activities;  and postal 
services. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
• Total amount for 2007:  €680 million and for 2008:  €750 million (increased to 
€790 million on the basis of the 2008 annua l performance report), disbursed pursuant 
to Articles 199 undecies  B and 217 undecies  of the General Taxation Code. 
 
7. Duration of the subsidy and/or any other time-limits attached to it  
 The current scheme is in force until 31 December 2017. 
 8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 Number of applications approved in 2007: 
  - Article 199 undecies  B:  271; 
 - Article 217 undecies :  66. 
  2008 data not available.  
2.3.4 Temporary exemption, subject to approval , from corporation tax for the creation of 
activities in French Overseas Departments 
 
1. Period covered by the notification
 
 2007 and 2008. 
 
2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 To promote economic development and em ployment in the Overseas Departments. 
 G/SCM/N/186/EEC/Add.9 
Page 20  
 
  3. Legal basis (reference, date
) 
 Article 208 quater  of the General Taxation Code, derivi ng from Article 9 of Law No. 60-1368 
of 21 December 1960, as last amended by Articles 86-I and 86-II of Law No. 2001-1275 of 28 December 2001.  
4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Tax concession.  Temporary exemption from corp oration tax for profits resulting from the 
authorized activity within the limits set forth in th e authorization.  The exemption does not apply to 
capital gains from the transfer of all or so me of the company's shares or fixed assets. 
 
5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions ) 
- Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Companies which, in a limited number of listed sectors, create a new activity likely to contribute to the economic development of the Overseas Departments and create new jobs. 
 
 - Allocation mechanism :  Prior authorization from the Minister for the Budget. 
  - Conditions :  Activities in agriculture, industry, the hotel trade, tourism with the 
exception of the cruise industry, fisheries, alternative sources of energy, construction 
and public works, transport, crafts, computer services, audiovisual and 
cinematographic production and broadcasti ng, maintenance services for all qualifying 
sectors, concessions for local public services of an industrial or commercial nature, and medium-standard welfare housing. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
• Total amount for 2007:  less than €500,000, and for 2008:  €1 million. 
 
7. Duration of the subsidy and/or any other time-limits attached to it  
 Exemption is granted for a ten-year peri od starting from the actua l commissioning of the 
installations to be used in carrying out the author ized activity.  The scheme applies to companies that 
submitted an application for authori zation prior to 31 December 2006. 
 
 The subsidy has not been extended.  8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 No authorization issued since 2005. 
 
2.3.5 Reduced taxation of profits from op erations in French Overseas Departments 
 
1. Period covered by the notification  
 2007 and 2008. 
  G/SCM/N/186/EEC/Add.9 
 Page 21 
 
 
  2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 To promote economic development and em ployment in the Overseas Departments. 
 3. Legal basis (reference, date)
 
 Article 217 bis of the General Taxation Code, derivi ng from Article 40-I of Law No. 65-566 
of 12 July 1965, as last amended by Article 87 of Law No. 2001-1275 of 28 December 2001. 
 This scheme was established under Law No. 2003-660 of 21 July 2003.  4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Tax concession.  One-third reduction of prof its or losses resulting fro m operations conducted 
in the Overseas Departments. 
 5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
- Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Enterprises subject to corporation tax and c onducting an activity in certain sectors in 
the Overseas Departments. 
 
 - Allocation mechanism :  By operation of law. 
  - Conditions :  Enterprises engaged in agricultural,  industrial, commercial or crafts 
activities outside the following sectors:  trade;   catering, with the exception of graded 
tourist restaurants, cafés, tobacconists and bars/public houses;  business advisory 
services and consultancy;  research and devel opment;  education, health and social 
welfare;  banking, finance and insurance;  all real estate activities;  the cruise industry, rental/leasing services without operators, with the exception of the rental of motor vehicles and pleasure boats, car repair;  business services, with the exception of 
maintenance, cleaning, packaging on a toll basis and call centres;  leisure, sporting 
and cultural activities, except, on the one hand, activities which are a direct and key component of hotel or tourism activities a nd which do not involve games of chance or 
gambling and, on the other hand, audiovi sual and cinematographic production and 
broadcasting;  associative activities;  and postal services. 
 
6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Total amount for 2007:  €85 milli on, and for 2008:  €90 million. 
 
7. Duration of the subsidy and/or any other time-limits attached to it  
 The scheme is applicable to accounting periods closed by 31 December 2017. 
 8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 Not available. 
 G/SCM/N/186/EEC/Add.9 
Page 22  
 
  2.3.6 Premium for job creation in French Overseas Departments 
 
1. Period covered by the notification
 
 2007 and 2008. 
 
2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 Job creation. 
 3. Legal basis (reference, date
) 
 Law No. 94-638 of 25 July 1994 and Law No. 2000-1207 of 13 December 2000; 
 
 Decree No. 95-504 of 2 May 1995 and D ecrees Nos. 2001-499/2001-502 of 11 June 2001. 
 4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Grant. 
 
5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions ) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Enterprises established in the f our French Overseas Departments. 
  - Allocation mechanism :  Prior authorization by order of the Government 
representative in the Department. 
  - Conditions :  Job creation. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Subsidy per unit per job created:  €34,650 (deg ressive disbursements over a ten-year period). 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 The premium is proportional to the number of  newly created jobs and is disbursed over 
ten years. 
 
8. Statistical data permitting an assessment of the trade effects of the subsidy  
 The trade effects of the subsidy pertain to the creation of 366 jobs in 2005 and 342 in 2006. 
   * production:  no; 
  * consumption:  no; 
  * extra-Community imports/exports:  no.   For products or sectors that have benefited fro m subsidies over the past three years and with 
reference to the year preceding that in whic h the subsidy was granted for the first time. 
 
 If the aid is widely available, or if sufficien tly precise data are not available or are negligible, 
this must be explained and ju stified in the notification.  G/SCM/N/186/EEC/Add.9 
 Page 23 
 
 
   
 If the aid is considered as having no trade effects (i.e. environment, R&D), this should also be explained and justified in the notification.   The aid has not been granted since 1 January 2007.  Disbursements made since that date 
concern commitments prior to 31 December 2006. 
 D. U
RBAN AREAS IN DIFFICULTY  
2.4.1 Measures on behalf of Urban Free Zones (ZFU) 
 
 Tax exemption for five years then a degressive reduction of 60 per cent, 40 per cent and 
20 per cent over three or nine years (depending on whether the enterprise employs less or more than five employees) for industrial, commercial, crafts or liberal-professional enterprises established in one 
of the Urban Free Zones (ZFU) created by the Law on the Urban Regeneration Pact of 14 November 1996 to 1 January 1997 or which set up operations in such a zone  between that date and 
the date of publication of Law No. 2006-3 96 of 31 March 2006 on equal opportunities, 
i.e. 3 April 2006.   This is also the case for enterprises establis hed on 1 January 2004 in  one of the 41 ZFUs 
created by Law No. 2003-710 of 1 August 2003 on urba n regeneration or which set up operations in 
such a zone between that date and the date of  publication of the aforementioned Law No. 2006-396, 
i.e. 3 April 2006. 
  Enterprises established on 1 January 2006 in one of the 15 new ZFUs created by Law No. 2006-396 of 31 Ma rch 2006 on equal opportunities or whic h set up operations in such a zone 
between that date and 31 December 2011, and in the other ZFUs (set up under the above Laws of 
14 November 1996 and 1 August 2003), benefit from tax exemption for five years then a degressive 
reduction over nine years (60 per cent for five year s, 40 per cent for two years and 20 per cent for 
two years) irrespective of the number of employees on their payroll.  1. Period covered by the notification
 
 2007 and 2008. 
 
2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 To promote the creation and maintenance of activities in Urban Free Zones. 
 3. Legal basis (reference, date
) 
 Article 44 octies  of the General Taxation Code, deri ving from Articles 2, 5A and 5C of 
Law No. 96-987 of 14 November 1996 (44 "f irst-generation" ZFUs) and extended by 
Law No. 2002-1576 of 30 December 2002.   Measures extended to 41 new ("second- generation") ZFUs provided for by 
Law No. 2003-710 of 1 August 2003 (enterprises estab lished in ZFUs on 1 January 2004 or which set 
up operations in such a zone between that date and the date of publication of Law No. 2006-396 of 
31 March 2006 on equal opportu nities, i.e. 3 April 2006). 
  Technical adjustments to the measures under Law No. 2003-1312 of 30 December 2003.  G/SCM/N/186/EEC/Add.9 
Page 24  
 
   The measures created by Article 44 octies  A deriving from Law No. 2006-396 of 
31 March 2006 ("third-generati on" ZFUs) replace the measure s provided for by Article 44 octies  
which ceased to apply to the creation of activities as of 1 January 2006 in all ZFUs. 
  Updating of Community references in Article 44 octies  and Article 44 octies  A (Article 45 of 
the Amending Finance Law for 2007 No. 2007-1824 of 25 December 2007. 
 4. Form of the subsidy (grant, loan, tax concession, etc.
) 
 Reduction in profits tax up to  a base ceiling of €61,000 per 12-month period for enterprises 
placed under the Article 44 octies  scheme and €100,000 per 12-month period, increased if necessary 
by €5,000 per new employee hire d from 1 January 2006 who is domiciled in a sensitive urban 
zone (ZUS), for enterprises under the Article 44 octies  A scheme. 
  Exemption is granted subject to compliance with European Commission Regulation (EC) No. 1998/2006 of 15 December 2006 on de minimis  aid: 
 
 - In "first-generation" ZFUs:  for enterprises exempt at 1 January 2007;   - in "second-generation" ZFUs:  for enterp rises engaged in activities at 1 January 2004; 
  - in "third-generation" ZFUs:  for enterp rises engaged in activities at 1 January 2006; 
 
 - for enterprises engaged in activities at 1 January 2007 within the extended perimeter 
of "first-generation" and "second-generation" ZFUs. 
 5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
- Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Industrial, commercial, crafts and non-comme rcial activities for their new or existing 
activities established in ZFUs. 
 
 - Allocation mechanism :  By operation of law. 
 
 - Conditions :  Enterprises must carry out an act ual activity involving a meaningful 
presence within a ZFU.  In the case of non- sedentary activity established in a ZFU 
but carried out entirely or partially outside of that zone, the activity is assumed to be carried out within a ZFU when at least one sedentary full-time employee carries out 
his/her work within the premises located in  a ZFU set aside for the activity, or when 
the enterprise realizes at least 25 per cent of  its turnover through clients located in the 
ZFU. 
   As for the 41 "second-generation" ZFUs, three new conditions have been established 
by Law No. 2003-1312 of 30 December 2003 regarding payroll numbers and turnover, holding of capital when the enterp rise has been set up as a company and the 
enterprise's sector of activity.  The new conditions were amended by 
Law No. 2005-32 of 18 January 2005 on planning and social cohesion. 
   These three conditions also apply to the new ("third-generation") ZFUs created under 
Law No. 2006-396 of 31 March 2006. 
  G/SCM/N/186/EEC/Add.9 
 Page 25 
 
 
  6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Total amount for 2007:  €175 million (amount for 2008:  €180 million). 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 Five years of total exemption, followed by a degressive reduction of 60 per cent, 40 per cent 
and 20 per cent over three or nine years (depending on whether the enterprise employs less or more than five employees).  The scheme provided for under Article 44 octies  applies to operations carried 
out up to the date of publication of Law No. 2006-396 of 31 March 2006 on equal opportunities. 
 
 The abovementioned Law of 31 March 2006 creates a new scheme codified under 
Article 44 octies  A of the General Taxation Code, which provides for total exemption for five years 
then the application of a degr essive reduction over nine years. 
 8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 Around 20,000 beneficiaries in 2007. 
 
III. R&D SCHEMES 
A. TAX CREDIT TO PROMOTE RESEARCH  
1. Period covered by the notification  
 2007 and 2008. 
 
2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 To encourage research. 
 3. Legal basis (reference, date
) 
 Articles 244 quater  B, 199 ter B, 220 B and 223 O of the General Taxation Code. 
 4. Form of the subsidy (grant, loan, tax concession, etc.
) 
 Tax concession - tax credit. 
 5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Industrial, commercial and agricultural enterprises. 
  - Allocation mechanism : 
 
  Calendar year 2007:  Tax credit equiva lent to the amount of a volume share, 
equivalent to 10 per cent of research expenditure for the year, and to a growth share, equivalent to 40 per cent of the amount by which research expenditure in a given year 
exceeds the average research expenditu re of the two previous years. 
 G/SCM/N/186/EEC/Add.9 
Page 26  
 
    Calendar year 2008:  Tax credit equivalent  to 30 per cent of research expenditure for 
the calendar year up to a ceiling of €1 milli on;  reduced to 5 per cent for the portion 
exceeding this ceiling. 
   The tax credit rises to 50 per cent in the first year and 40 per cent in the second year 
for enterprises receiving the tax credit fo r the first time and for those not having 
benefited over the preceding five years, pr ovided that their dealings with any other 
enterprise having received the tax credit over the same five-year period are at arm's length, within the meaning of Article  39.12 of the General Taxation Code. 
  As regards collection expenditure, the maximum tax credit for research is €200,000 
over a period of three financia l years, in accordance with the de minimis  rule in 
Commission Regulation No. 1998/2006 of 15 December 2006. 
  - Conditions :  The enterprise must have exerci sed an option under the terms and 
conditions and within the deadlines set out in the law. 
 
6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
• Total amount for 2007:  €1,000 m illion and for 2008:  €1,390 million. 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 Indefinite period. 
 
8. Statistical data permitting an assessment of the trade effects of the subsidy  
 The aid has no effect on trade as it is linked to  the enterprise's research activity and not to its 
production or commercial capacity.  This is a genera l and non-specific fiscal measure which is not 
regarded as a subsidy by the French authorities.  The aid, which concerns around 6,500 beneficiaries, 
is notified in the interests of transparency. 
 B. N
ATIONAL RESEARCH AGENCY (ANR) 
1. Period covered by the notification  
 2005 to 2008. 
 
2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 - To create new partnerships between public research and industrial research; 
  - to launch projects in new fiel ds of research and technology; 
 
 - to foster the development of research a nd the transfer of technology in the regions. 
 3. Legal basis (reference, date
) 
 Agreement of 7 February 2005 establishing th e National Research Agency Public Interest 
Group (GIP ANR). 
 
 Decree No. 2006-963 of 1 August 2006 relating to the organization and operation of the 
ANR.  G/SCM/N/186/EEC/Add.9 
 Page 27 
 
 
   
 Regulations of 28 February 2005 relating to th e procedures for the allocation of aid by the 
ANR.   Regulations of 9 March 2006 relating to the pr ocedures for the allocation of aid by the ANR. 
 
 Regulations of 20 December 2007 relating to th e procedures for the allocation of aid by the 
ANR.  4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 - Subsidy (grant) appearing on the green  list (Article 8.2(a)) and representing a 
maximum of 50 per cent of the total cost of the programme for enterprises.  In certain 
cases, governed by the Decree of 13 February 2002, direct government aid may amount to 100 per cent of subsidizable e xpenditure (associations, foundations, public 
interest groups - GIP); 
 
 - all enterprises and public bodies engaged in basic research work or pre-competition 
development activities may apply under the same conditions. 
 5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsidy,  the producer, the exporter, other) :  The 
ANR is not intended to provide aid to enterprises, but to support research projects.  
Fifty calls for projects were launc hed in 2007 and also in 2008. 
   In 2008, 15.4 per cent of the grants went  to enterprises and 80.2 per cent to public 
research institutions. 
 
  This allocation mechanism by type of beneficiary has hardly changed since the 
creation of the ANR in 2005. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Commitments made following the ANR 's calls for projects since 2005: 
  2005 :  € 539.9 million, including 93.5 allocated to enterprises; 
 2006 :  € 621.2 million, including 110.3 allocated to enterprises; 
 2007 :  €607.4 million, including 91.8 allocated to enterprises; 
 2008 :  €644.6 million, including 99.7 allocated to enterprises. 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 Permanent arrangement. 
 8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 The projects in question are part of the upstr eam phase of the R&D process.  The subsidies 
have no measurable impact on the trade performance of the enterprises involved.  Only scientific and 
technical content is considered in the selection and evaluation of projects .  This is general, 
non-specific aid within the meaning of the Agreement.  The aid is notified strictly in the interests of 
transparency. G/SCM/N/186/EEC/Add.9 
Page 28  
 
   
C. I
NDUSTRIAL INNOVATION FUND (FII) 
1. Period covered by the notification  
 2007 (the scheme ended in 2007). 
 
2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 To encourage the development of large-scale, st rategically or commercially important civilian 
industrial projects of a distinctly innovative nature  and the purpose of which is the marketing of a 
product or process determined by the management of the enterprises within a period of less than 
five years. 
 
3. Legal basis (reference, date ) 
 Approval on 10 November 1989 for the Industrial Innovation Fund (FII) " Grands Projets 
Innovants " and on 1 December 1986 for the Electronic Systems part (No. SG 86/D 14441). 
 
 Aid Number :  No. 79/89 in 1989;  No. 5/95 on 23 February 1995. 
  Approval by the Commission on 23 February 1995,  7 February 1994 and 19 May 1995 for the 
Electronic Systems part.  4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Repayable advances and subsidies. 
 5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
General support scheme for projects pertaining to all industrial groups, irrespective of 
size. 
  - Conditions :  The amounts taken into consid eration are fairly substantial 
 (approximately F15 to 50 million). 
   The gross level of aid is 30 per cent, although it may be increased by 10 per cent in 
cases where intersectoral or cooperative proj ects are financed from the basic research 
stage onwards. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Budget:  2007:  €434 million. 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 Permanent arrangement funded on a yearly basis under the Finance Law. 
 8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 The purpose of the programme is to finance innovation:  G/SCM/N/186/EEC/Add.9 
 Page 29 
 
 
   
 - The expenditure financed concerns R&D and consequently has no effect on 
production costs; 
  - being innovative, the products and pro cesses in question do not compete with existing 
ones. 
  The programme consequently has no trade effect and is notified merely in the interests of transparency.  
D. F
UND FOR ENTERPRISE COMPETITIVENESS (FCE) 
1. Period covered by the notification  
 2008. 
 2. General policy objective and/or purpos e of the subsidy (or aid scheme
) 
 Support for collaborative R&D projects designe d to overcome technological barriers, which 
are selected on the basis of a call for projects publ ished on the Internet, either domestically through 
competitiveness clusters, or at Europ ean level via the Eureka clusters. 
  In exceptional cases, the FCE may provide suppor t for so-called "strategic" projects, which 
were not selected under previous calls for projects an d are not collaborative in nature.  According to 
the French authorities, such exceptions are warr anted by the need for speedy action because the 
enterprises involved have tighter decision-making d eadlines than is usually the case for R&D projects. 
 3. Legal basis (reference, date
) 
 17 September 2007. 
 
 Aid Number :  No. 269/2007. 
 4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Subsidies. 
 
5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions ) 
• The recipient projects are implemented by large enterprises, SMEs and research 
institutions. 
 
• These projects are medium-scale (a few milli on euros on average) and are devoted to 
industrial research and experimental devel opment.  Prior technical feasibility studies 
are also supported by the FCE. 
 
• The maximum levels of aid are as follows: 
 
  - 50 per cent for industrial research activities;   - 25 per cent for experimental development activities.  
  The above rates may be increased as follows, up to a ceiling of 80 per cent: 
 G/SCM/N/186/EEC/Add.9 
Page 30  
 
    - Plus 20 and 10 percentage points fo r small and medium-sized enterprises 
respectively; 
  - plus 15 percentage points for collaborative activities.  6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Budget:  2008:  amount not available at 30 April 2009. 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 Permanent arrangement funded on a yearly basis under the Finance Law. 
 
8. Statistical data permitting an assessment of the trade effects of the subsidy  
 The purpose of the programme is to finance innovation: 
  - The expenditure financed concerns rese arch and development and consequently has 
no effect on production costs; 
  - being innovative, the products and pro cesses in question do not compete with existing 
ones. 
  The programme consequently has no trade effect and is notified merely in the interests of 
transparency. 
 E. N
ATIONAL AGENCY FOR THE PROMOTION OF RESEARCH (ANVAR) 
1. Period covered by the notification  
 2007 (scheme ended on 31 December 2007). 
 
2. General policy objective and/or purpos e of the subsidy (or aid scheme ) 
 To make full use of the results of scientific and technical research. 
  To promote innovation and technological progress.  
 To facilitate the transfer of the results of laboratory research to industry. 
 3. Legal basis (reference, date
) 
 Decree No. 97-152 of 19 February 1997 on the organization and operation of ANVAR and 
Decree No. 97-682 of 31 May 1997 concerning aid for innovation. 
 
 Notification by the French authorities of 3 February 1988, amended on 15 June 1989 and again on 28 January 1994.   Adoption by the European Commission on 17 July 1989 (SG(89) 9616), amended on 10 April 1990 and again on 14 March 1994. 
  G/SCM/N/186/EEC/Add.9 
 Page 31 
 
 
  4. Form of the subsidy (i.e. grant, loan, tax concession, etc. ) 
 Interest-free loan:  repayable over a three to fi ve-year period in the event of the technical and 
commercial success of the R&D project. 
 
 The loan becomes a non-reimbursable  subsidy should the project fail. 
 
 Direct subsidies for studies conducted prior to  the launching of R&D and innovation projects 
and for feasibility a nd advisory studies. 
 5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Enterprises with fewer than 2,000 employees. 
  - Allocation mechanism. 
 
 - Conditions :  Aid for innovation projects, aid for new technological enterprises either 
being set up or in existence for less than  three years, following a technical and 
financial study of the programme, and aid for the recruitment of researchers. 
   Submission of an annual report to the Commission.  
  Notification of cases of application for projects valued at over €25 million. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Repayable advances with a ceiling of 40 per cen t of the intangible investment (maximum of 
24.6 per cent in gross subsidy equivale nt in the event of project success). 
  Direct subsidies up to a ceiling of F 200,000, with a maximum rate of 50 per cent.   Amount for 2007:  €317.18 million  
7. Duration of the subsidy and/or any other time-limits attached to it
 
 Permanent arrangement funded on a yearly basis under the Finance Law. 
 8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 The purpose of the programme is to finance innovation: 
 
 - The expenditure financed concerns R&D and consequently has no effect on 
production costs; 
  - being innovative, the products and pro cesses in question do not compete with existing 
ones. 
 
 Consequently, the programme has no effect on trade.  G/SCM/N/186/EEC/Add.9 
Page 32  
 
  F. OSEO
 INNOVATION AID SCHEME FOR RESEARCH , DEVELOPMENT AND INNOVATION (RDI) 
1. Period covered by the notification  
 2008. 
 2. General policy objective and/or purpos e of the subsidy (or aid scheme
) 
• To support SMEs conducting research and innovation projects with domestic and 
external marketing potential. 
 
• To support the creation of innovative enterprises. 
 
• To support the dissemination of innovation through the transfer of technology and 
R&D cooperation. 
 
3. Legal basis (reference, date ) 
 Decree No. 2005-466 of 8 July 2005 adopting the Articles of Association of the public limited 
liability company OSEO-ANVAR.   Aid scheme No. 408/2007 adopted by the European Commission on 17 January 2008. 
 
4. Form of the subsidy (i.e. grant, loan, tax concession, etc.
) 
 Loans repayable without interest on the basi s of a retrospective study of the risks and 
subsidies.  
5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
SMEs and large enterprises cooperating with  SMEs, and medium-sized enterprises 
with up to 2,000 employees. 
  - Allocation mechanism.  
 
 - Conditions : 
 
• Support for R&D projects (large enterprises and SMEs):  The maximum 
levels of aid are as follows: 
 
- 50 per cent for industrial research activities; 
- 25 per cent for experimental development activities.  
   These rates may be increased as fo llows, up to a ceiling of 80 per cent: 
   - Plus 20 and 10 percentage points for small and medium-sized 
 enterprises, respectively; 
   - plus 15 percentage points for collaborative activities.  
• Support for industrial research feasibility studies (maximum level of aid:  
60 per cent) and experimental deve lopment feasibility studies (maximum 
level:  50 per cent).  G/SCM/N/186/EEC/Add.9 
 Page 33 
 
 
   
• Support for patent applications (SME s only):  covers SMEs' intellectual 
property application, grant and rene wal costs, up to the ceiling amounts 
specified for R&D projects. 
 
• Support for recruitment for innovation purposes (SMEs):  covers up to 75 per 
cent of the costs of recruiting qualified personnel. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Budget:  2008:  amount not available at 30 April 2009. 
 
7. Duration of the subsidy and/or any other time-limits attached to it  
 Permanent arrangement funded on a yearly basis under the Finance Law. 
 8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 The purpose of the programme is to finance innovation: 
 
 - The expenditure financed concerns R&D and consequently has no effect on 
production costs; 
  - being innovative, the products and pro cesses in question do not compete with existing 
ones. 
 
 The programme consequently has no effect on trade.  G. I
NDUSTRIAL INNOVATION AGENCY AID FOR INDUSTRIAL INNOVATION PROMOTION 
PROGRAMMES (PMII) 
1. Period covered by the notification  
2007 and 2008. 
 2. General policy objective and/or purpos e of the subsidy (or aid scheme
) 
 To initiate collaborative indus trial innovation promotion programmes aimed at developing a 
new high-technology product or service on a global market scale over a five to ten-year period and 
comprising a strong innovation component marked by scientific novelty or the combination of several 
complex technologies.  Cooperation at European level is encouraged.  3. Legal basis (reference, date
) 
 Aid Number :  No. 121/2006 approved by the European Commission on 19 July 2006. 
 
4. Form of the subsidy (i.e. grant, loan, tax concession, etc. ) 
• Experimental development stages:  advances repayable at the Community rate in 
force, increased by an additional amount  repayable in the event that performance 
exceeds the anticipated th eoretical success rate. 
 G/SCM/N/186/EEC/Add.9 
Page 34  
 
  • Industrial research stages:  subsidies. 
 
5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions
) 
 - Beneficiaries (who receives the subsid y, the producer, the exporter, other) :  
Large industrial enterprises, SMEs and research laboratories. 
 
 - Allocation mechanism  
  - Conditions :  The maximum levels of aid are as follows: 
   - 50 per cent for industrial research activities (subsidies); 
  - 40 per cent for experimental development activities (repayable advances). 
   These rates may be increased as fo llows, up to a ceiling of 80 per cent: 
   - plus 20 and 10 percentage points for small and medium-sized enterprises, 
respectively; 
  - plus 15 percentage points for collaborative activities. 
 6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Budget : 
 
 - 2007:  €25.49 million;  - 2008:  amount not available at 30 April 2009.  7. Duration of the subsidy and/or any other time-limits attached to it
 
 Permanent arrangement funded on a yearly basis under the Finance Law. 
 8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 The purpose of the programme is to finance R&D: 
  - The expenditure financed concerns R&D and consequently has no effect on 
production costs; 
  - being innovative, the products and pro cesses in question do not compete with existing 
ones. 
 
 A detailed analysis of market failures is carried  out to ensure that the programme has no trade 
effects.  Large-scale projects have been  notified for the sake of transparency. 
 H. A
ID TO RESEARCH INSTITUTIONS IN THE CIVIL AVIATION SECTOR  
1. Period covered by the notification  
 2007 and 2008. 
  G/SCM/N/186/EEC/Add.9 
 Page 35 
 
 
  2. Policy objective  
 The main purpose of the scheme is to he lp a number of non-profit-making research 
institutions to obtain the necess ary equipment for their work. 
 3. Legal basis
 
 Annual Finance Law. 
  Arrangement approved by the European Commission (No. 51/2006).  4. Form of the subsidy
 
 Non-repayable subsidy. 
 5. Beneficiaries of the aid and allocation mechanism
 
 Mainly ONERA and ETW (European Transonic Wind Tunnel). 
 
6. Total amount  
 In 2007:  €3.8 million 
 In 2008:  €3.9 million  7. Duration of the subsidy
 
 Permanent scheme funded on an annual basis under the Finance Law. 
 
8. Statistical data  
 The entities concerned are non-profit-making. 
 I. C
IVIL AVIATION RESEARCH  
1. Period covered by the notification  
 2007 and 2008. 
 2. Policy objective
 
 The overall objective of the research is to develop knowledge in order to improve the 
technological base of the industry. 
 
 The research involves improving the understa nding of phenomena with a view to selective 
further investigation in areas likely to yield gain s in performance and in calculation accuracy with a 
view to shorter design cycles, as well as full-size testing.  
3. Legal basis
 
 Annual Finance Law. 
  Arrangement approved by the European Commission (No. 51/2006).  G/SCM/N/186/EEC/Add.9 
Page 36  
 
  4. Form of the subsidy
 
Non-repayable subsidy intended to finance part of the cost of several previously selected 
research operations. 
 
5. Beneficiaries of the aid and allocation mechanism  
 In addition to research institutions, 17 ente rprises were involved in 2007 and 23 in 2008. 
 6. Total amount
 
 In 2007:  €50.4 million 
 In 2008:  €101.6 million 
 
7. Duration of the subsidy  
 Permanent arrangement funded on a yearly basis under the Finance Law. 
 8. Statistical data
 
 The aid goes entirely to research and therefore has no bearing on product manufacture. 
 J. Y
OUNG INNOVATIVE ENTERPRISES (JEI) 
1. Period covered by the notification  
 2007 and 2008. 
 
2. General policy objective  
 To support young innovative enterprises undertaking R&D projects. 
 3. Legal basis
 
 Articles 44 sexies -0 A and 44 sexies  A of the General Taxation Code, deriving from 
Law No. 2003-1311 of 30 December 2003, as amende d by Article 46 of the Amending Finance Law 
for 2007 No. 2007-1824 of 25 December 2007 and Article 71 of Finance Law for 2008 No. 2007-1822 of 24 December 2007.  4. Form of the subsidy
 
 Total relief from income tax or corporation tax during the first three years of profitable 
business, then a reduction of 50 per cent for the follo wing two years of profitable business, within the 
seven-year period following the date of creation.   Exemption granted to enterprises eligible for JE I status and the related advantages is subject 
to compliance with European Commission Regulation (EC) No. 1998/2006 of 15 December 2006 on 
de minimis  aid. 
 5. Beneficiaries of the aid and allocation mechanism
 
 - Beneficiaries :  Small and medium-sized enterprises established for less than eight 
years which incur research and developm ent spending representing at least 15 per  G/SCM/N/186/EEC/Add.9 
 Page 37 
 
 
  cent of their tax-deductible costs or qualifying as "young university enterprises", and 
at least 50 per cent of whose share capital is held continuously by exhaustively listed 
natural persons or certain enterprises involved in the venture capital sector. 
  - Allocation mechanism :  By operation of law. 
 
 - Conditions :  Enterprise not created within th e framework of the concentration, 
re-structuring, or extension of pre-existi ng activities or resumption of such activities. 
 6. Total amount
 
 Total amount for 2007:  €8 milli on, and for 2008:  €9 million. 
 7. Duration of the subsidy
 
 - Scheme applicable to financial year s commencing on or after 1 January 2004; 
 
 - for "young university enterprises":  schem e applicable to financial years commencing 
on or after 1 January 2008. 
 8. Statistical data
 
 Around 470 beneficiaries in 2007. 
 IV. SECTORAL REGIME 
A. T
ONNAGE -BASED TAX SCHEME  
1. Period covered by the notification  
 2007 and 2008. 
 
2. Policy objective of aid scheme  
 To enable enterprises operating in maritime transport to meet international competition, 
safeguard Community jobs, preserve maritime know-how and maintain high safety levels with regard 
to ships and navigation.  3. Legal basis
 
 Article 209-0 B of the General Taxation Code deriving from Law No. 2002-1576 of 
30 December 2002 (Article 19-I and 19-III).  4. Form of assistance
 
 Specific tax base:  the tonnag e-based tax scheme replaces a rate based on accounting data by 
a flat rate calculated on the basis of the vessel's tonnage. 
 5. Beneficiaries of the aid and allocation mechanism
 
 - Beneficiaries :  Enterprises subject to company tax, at least 75 per cent of whose 
turnover is generated by the operation of me rchant vessels, and which operate vessels 
falling within the scope of the measure. G/SCM/N/186/EEC/Add.9 
Page 38  
 
   
 - Allocation mechanism :  Upon option by the enterprise made for a period of 
ten years. 
  - Conditions :  Operation of merchant vessels of a minimum tonnage (over 100 units of 
the universal gross tonnage system), engage d in the transportation of passengers or 
goods, towing on the high seas, salvage and other maritime assistance services or 
transport operations relating to the perfo rmance of all other services necessarily 
provided at sea and whose strategic and comme rcial management is based in France. 
 
6. Subsidy per unit or, where this is not possibl e, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year ) 
 Total amount for 2007:  €40 milli on, and for 2008:  €200 million) 
 7. Duration of the subsidy and/or any other time-limits attached to it
 
 This scheme has been in effect since 1 January 2003. 
 8. Statistical data permitting an assessment of the trade effects of the subsidy
 
 None. 
 
__________