WORLD TRADE  
ORGANIZATION   
G/SCM/N/220/EEC/Add.9 
16 November 2011 
 (11-5228) 
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 UNION 
 
Addendum 
   The following addendum to the notification of the European Union relates to the subsidy programmes of France . 
 
_______________ 
 G/SCM/N/220/EEC/Add.9 
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  FRANCE 
 
Table of contents 
 
Page 
 
I.  SME SCHEMES ................................................................................................................... .... 4 
A.  REGIONAL PREMIUM FOR THE CREATION OF ENTERPRISES (PRCE) .......................................... 4  
B.  REGIONAL EMPLOYMENT PREMIUM (PRE) ................................................................................ 5  
C.  SME-SMI  DEVELOPMENT FUND ................................................................................................ 6  
II.  REGIONAL SCHEMES .......................................................................................................... 7  
A.  METROPOLITAN FRANCE  ............................................................................................................ 7  
1.  Tax reduction for new enterprises ........................................................................................... 7  
2.  Land-Use Management Premium (PAT) ................................................................................ 9  
B.  CORSICA  .............................................................................................................................. ...... 10 
1.  Exemption, subject to approval, from co rporation tax on profits resulting from 
new activities create d in Corsica ........................................................................................... 1 0 
2.  Tax exemption for profits realized by en terprises set up in Corsica in the crafts, 
industrial, hotel, construction and public works sectors ..................................................... 11  
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 ) ............ 12  
4.  Tax credit for certain investments ma de and exploited in Corsica .................................... 13  
C.  FRENCH OVERSEAS DEPARTMENTS (FOD) .............................................................................. 14  
1.  Long-term tax treatment in French Overseas Departments ............................................... 14  
2.  VAT deduction for certain exempted products .................................................................... 16  
3.  Deduction of investments in French Overseas Departments and Territories ................... 17  
4.  Temporary exemption, subject to approval, from corporation tax for the 
creation of activities in French Overseas Departments ....................................................... 18  
5.  Reduced taxation of profits from operat ions in French Overseas Departments ............... 19  
6.  Tax reduction for profits from operations Overseas ........................................................... 21  
7.  Premium for job creation in French Overseas Departments .............................................. 22  
D.  URBAN AREAS IN DIFFICULTY  .................................................................................................. 23  
1.  Measures on behalf of Ur ban Free Zones (ZFU) ................................................................. 23  
III. R&D SCHEMES ................................................................................................................... .. 25 
A.  TAX CREDIT TO PROMOTE RESEARCH  ...................................................................................... 25  
B.  NATIONAL RESEARCH AGENCY (ANR) .................................................................................... 27  
C.  FUND FOR ENTERPRISE COMPETITIVENESS (FCE).................................................................... 28   G/SCM/N/220/EEC/Add.9 
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  D.  OSEO  INNOVATION AID SCHEME FOR RESEARCH , DEVELOPMENT AND INNOVATION 
(RDI) ......................................................................................................................... ................ 30  
E.  INDUSTRIAL INNOVATION AGENCY AID FOR INDUSTRIAL INNOVATION PROMOTION 
PROGRAMMES (PMII) ............................................................................................................... 32  
F.  AID TO RESEARCH INSTITUTIONS IN THE CIVIL AVIATION SECTOR  ......................................... 33  
G.  CIVIL AVIATION RESEARCH  ...................................................................................................... 34  
H.  YOUNG INNOVATIVE ENTERPRISES (JEI).................................................................................. 34  
IV.  SECTORAL REGIME ........................................................................................................... 36  
A.  TONNAGE -BASED TAX SCHEME  ............................................................................................... 36  
 
 G/SCM/N/220/EEC/Add.9 
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  I. SME SCHEMES 
A. R
EGIONAL PREMIUM FOR THE CREATION OF ENTERPRISES (PRCE) 
1. Period covered by the notification 
 2009 and 2010. 
 
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) 
 2009:  €33 million 
 2010:  €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/220/EEC/Add.9 
 Page 5 
 
 
  B. REGIONAL EMPLOYMENT PREMIUM (PRE) 
1. Period covered by the notification 
 2009 and 2010. 
 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 paym ent 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 possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 2009:  €43 million  2010:  €43 million  7. Duration of the subsidy and/or an y other time-limits attached to it 
 Ten years from 2000. 
 G/SCM/N/220/EEC/Add.9 
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  8. Statistical data permitting an assessmen t 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. SME-SMI
 DEVELOPMENT FUND 
1. Period covered by the notification 
 2009. 
 2. General policy objective and/or pur pose 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. gr ant, loan, tax concession, etc.) 
 
 Subsidy. 
 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. 
  G/SCM/N/220/EEC/Add.9 
 Page 7 
 
 
   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 possi ble, 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:  €10.228 million. 
 Total amount for 2009:  €3.867 million. 
 7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Scheme expired.  The 2009 amount is for operations to be completed. 
 
8. Statistical data permitting an assessmen t 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. 
 
II. REGIONAL SCHEMES 
A. METROPOLITAN FRANCE  
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 
 
 2009 and 2010. 
 3. General policy objective and/or pur pose of the subsidy (or aid scheme) 
 
 To promote the creation of new enterprises in areas with geographical, economic or social 
disadvantages. 
 G/SCM/N/220/EEC/Add.9 
Page 8  
 
  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, extended 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 amended by 
Article 87 of the Amending Finance Law for 2006 No. 2006-1771 of 30 December 2006, by 
Article 45 of the Amending Finance Law for 200 7 No. 2007-1824 of 25 December 2007, and by 
Article 62 of the Amending Finance Law fo r 2009 No. 2009-1674 of 30 December 2009. 
 5. Form of the subsidy (i.e. gr ant, loan, tax concession, etc.) 
 
 Tax concession.  Exemption from profits tax until the end of the twenty-third month 
following the month of set-up, followed by a reduc tion for profits earned over the three subsequent 
12-month periods (75 per cent, then 50 per cent, then 25 per cent).  However, enterprises which set up in rural revitalization areas between 1 January 2004 and 31 December 2010 are eligible for exemption 
from profits tax until the end of the fifty-ninth month following the month of set-up, followed by a 
reduction for profits earned over the nine subse quent 12-month periods (60 per cent in the 
first five 12-month periods, 40 per cent in the sixt h and seventh 12-month periods, and 20 per cent in 
the eighth and ninth 12-month periods).   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 directly or indir ectly 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.  
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 possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Total amount for 2009:  €1 20 million (€120 million in 2010). 
 Average subsidy per unit:  around €2,830 in 2009.  
8. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Five years (or 14 years for enterprises created between 1 January 2004 and 31 December 2010 in rural revitalization areas), th e scheme being applicable to enterprises set up 
until 31 December 2010.  G/SCM/N/220/EEC/Add.9 
 Page 9 
 
 
   
9. Statistical data permitting an assessmen t of the trade effects of the subsidy 
 
 Around 42,400 beneficiaries in 2009.  2. Land-Use Management Premium (PAT) 
1. Period covered by the notification 
 
 2009 and 2010.  
2. General policy objective and/or pur pose of the subsidy (or aid scheme) 
 
 Development of activities in priority zon es (regional aid zoning), and development of 
R&D activities throughout the territory.  
3. Legal basis (reference, date) 
 
The current scheme is governed by two decrees and an order:  
 Decree No. 2007-809 of 11 May 2007, amended, concerning the land-use 
management premium for industry and services; 
 
 Decree No. 2007-1029 of 15 June 2007  concerning the land-use management 
premium for research, deve lopment and innovation; 
 
 Order of 03 March 2010  establishing  the composition and operating rules of the 
Interministerial Commission on aid for the localization of activities, the procedures 
for preparing and submitting applications for the premium, the procedures for the 
notification of decisions, the list of qualifying sections of the classification of 
economic activities or products, and the closing date for the submission of 
applications. 
 4. Form of the subsidy (i.e. gr ant, 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 : 
 
Industry and services PAT 
   Three categories of projects are eligible:  G/SCM/N/220/EEC/Add.9 
Page 10  
 
   creation of activities: 
 
 where the enterprise invests at least €5 million and creates 25 jobs;  or 
 where the enterprise creates at least 50 jobs; 
 extensions: 
 where 25 jobs are created and this represents an increase of more than 
50 per cent of the company's workforce;  or 
 where at least 50 jobs are created;  or 
 where the enterprise's eligible investment amounts to €10 million; 
 takeovers of sites which are in difficulty, l eading to the takeover of at least 80 jobs 
and the investment of at least €5 million.  
 
  Research – Development – Innovation PAT 
 
  The programme envisaged must lead to the creation of at least 20 jobs or to research 
costs of at least €7.5 million. 
 
6. Total annual amount 
 
 2009:  €43.5 million.  2010:  €37.2 million.  
7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 General scheme valid until 31 December 2013.  8. Statistical data permitting an assessmen t of the trade effects of the subsidy 
  
 2009  2010  
Number of jobs assisted 5,571 11,392 
Investments assisted €738 million €631 million 
 
Note:  research expenditure supported 
 
2009:  €146 million 2010:  €181 million 
 
B. C
ORSICA  
1. Exemption, subject to approval, from corporation tax on profits resulting from 
new activities created in Corsica 
1. Period covered by the notification 
 
2009. 
  G/SCM/N/220/EEC/Add.9 
 Page 11 
 
 
  2. General policy objective and/or pur pose 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 amende d by Article 4-I of Law No. 94-1131 of 
27 December 1994.  
4. Form of the subsidy (i.e. gr ant, 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. 
 
- Allocation mechanism :  Approval. 
 
- Conditions :  Subject to approval. 
 6. Subsidy per unit or, where this is not possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
None. 
 7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Eight years;  the scheme closed on 1 January 1999. 
 
8. Statistical data permitting an assessmen t of the trade effects of the subsidy 
 
This measure no longer has any effects. 
 2. Tax exemption for profits realized by ent erprises set up in Corsica in the crafts, 
industrial, hotel, construction and public works sectors 
1. Period covered by the notification 
 
2009. 
 
2. General policy objective and/or pur pose 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 ame nded by Article 4-II and -III of Law No. 94-1131 of 
27 December 1994. G/SCM/N/220/EEC/Add.9 
Page 12  
 
   
4. Form of the subsidy (i.e. gr ant, 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 possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
None. 
 7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Eight years;  the scheme closed on 1 January 1999.  8. Statistical data permitting an assessmen t of the trade effects of the subsidy 
 
 This measure no longer has any effects. 
 
3. Profits tax exemption for industrial, comme rcial, 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 
 
 2009 and 2010.  2. General policy objective and/or pur pose 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, by 
Article 33 I 1º a and b of Law No. 2003-721 of 1 August 2003, by Article 45 of the Amending 
Finance Law for 2007 No. 2007-1824 of 25 December 2007 and by Article 108 of the Finance Law for 2010 No. 2010-1673 of 30 December 2009.  4. Form of the subsidy (i.e. gr ant, 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 sixty months  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.  G/SCM/N/220/EEC/Add.9 
 Page 13 
 
 
   
 The profits exempted may not exceed €61,000 per 12-month period, and eligibility for the 
exemption is subject to compliance with Commission Regulation (EC) No. 1998/2006 of 
15 December 2006 on the application of Articles 87 and 88 of the Treaty to de minimis  aid. 
 
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 crafts enterpri ses and, under certain conditions, companies 
engaged in non-commercial activities and agri cultural 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 possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Total amount for 2009:  €2 million (€1 million in 2010). 
 Average amount of the subsidy per unit:  around €42,700 in 2009. 
 
7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Five years (+ four years of degressive reduction) .  As this subsidy has not been extended, the 
scheme closes with effect from 1 January 2011.  
8. Statistical data permitting an assessmen t of the trade effects of the subsidy 
 
 Around 750 beneficiaries in 2009.  
4. Tax credit for certain investments made and exploited in Corsica 
1. Period covered by the notification 
 
 2009 and 2010.  2. General policy objective and/or pur pose of the subsidy (or aid scheme) 
 
 To promote investment in Corsica. 
 3. Legal basis (reference, date) 
  Article 244 quater  E, 199 ter D and 220 D of the Genera l Taxation Code, deriving from 
Article 48 of Law No. 2002-92 of 22 Janua ry 2002 on Corsica.  Article 244 quater  E was last amended 
by Article 129 of the Finance Law for 2011 No. 2010-1657 of 29 December 2010.  4. Form of the subsidy (i.e. gr ant, loan, tax concession, etc.) 
 
 Tax concession.  Tax credit equivalent to  20 per cent of pre-tax investment costs. G/SCM/N/220/EEC/Add.9 
Page 14  
 
   
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 possi ble, 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 for 2009 and 2010:   €26 million in 2009 and €30 million in 
2010. 
 
 Number of beneficiaries in 2009:  3,240 enterprises. 
 
 average amount of the subsidy per unit:  €8,000. 
 7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 This aid scheme applies to investments made between 1 January 2002 and 31 December 2011. 
 
8. Statistical data permitting an assessmen t of the trade effects of the subsidy 
 
 Not available.  
C. F
RENCH OVERSEAS DEPARTMENTS (FOD) 
1. Long-term tax treatment in French Overseas Departments 
1. Period covered by the notification 
 
 2009 and 2010.  
2. General policy objective and/or pur pose 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. 
  G/SCM/N/220/EEC/Add.9 
 Page 15 
 
 
  4. Form of the subsidy (i.e. gr ant, 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 possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Total amount for 2009 and 2010:  under €500,000. 
 7. Duration of the subsidy and/or an y 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 assessmen t 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.  G/SCM/N/220/EEC/Add.9 
Page 16  
 
  2. VAT deduction for certain exempted products 
1. Period covered by the notification 
 
 2009 and 2010.  
2. General policy objective and/or pur pose of the subsidy (or aid scheme) 
 
 To promote economic development in Ov erseas Departments and investment by local 
enterprises, by enabling new capital goods purchased  by these enterprises to benefit from the 
uncollected recoverable VAT (TVA NPR) special mechanism. 
 
3. Legal basis (reference, date) 
  Article 295 A of the General Taxation Code (CGI) deriving from Article 30 I 2° of Law 
No. 2009-594 of 27 May 2009 on overseas economic development. 
 
4. Form of the subsidy (i.e. gr ant, loan, tax concession, etc.) 
 
 Tax concession.  Persons eligible under the T VA NPR mechanism are authorized to increase 
their VAT deduction by an amount calculated fictitiously, based on only the value of new capital goods purchased or imported exempt from VAT, in accordance with the provisions of Article 295 1° 
and 5° of the CGI.  These goods are listed in Articles 50 undecies  and 50 duodecies  of Annex IV to the 
CGI.  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 and e ngaged in activities there which are eligible for the 
deduction by application of Article 271 of the CGI. 
  - Allocation mechanism :  Deduction of VAT. 
 
 - Conditions :  The deduction of uncollected VAT  takes place following the import or 
purchase of exempted new capital goods. 
 6. Subsidy per unit or, where this is not possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Total amount for 2009:  €160 million. 
 
 Total amount for 2010:  €100 million. 
 7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Permanent scheme.  8. Statistical data permitting an assessmen t of the trade effects of the subsidy 
 
 Not available. 
  G/SCM/N/220/EEC/Add.9 
 Page 17 
 
 
  3. Deduction of investments in French  Overseas Departments and Territories 
1. Period covered by the notification 
 
 2009 and 2010.  
2. General policy objective and/or pur pose 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 th e Finance Law for 2009 No. 2008-1425 of 
27 December 2008 and Law No. 2009-594 of 27 May 2009 on overseas economic development. 
 4. Form of the subsidy (i.e. gr ant, 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 €250,000 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 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;  with some exceptions, such invest ments 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 following sectors:  trade;  cafés, tobacconists and bars/public houses, as well as catering with the exception of G/SCM/N/220/EEC/Add.9 
Page 18  
 
  restaurants which are run by a person who has been awarded the title of maître 
restaurateur and which have been audited for the purposes of the award of that title 
and, where applicable, tourist restaurants which were graded on the date of publication of Law No. 2009-888 of 22 July 2009 on the development and 
modernization of tourism services;  business advisory services and consultancy;  
education, health and social welfare;  banki ng, finance and insurance;  all real estate 
activities;  the cruise industry, car repair, rental/leasing services without operators, with the exception of the direct rental of pleasure boats or to natural persons using, 
for a period not exceeding two months, private motor vehicles within the meaning of Article 1010 of the CGI;  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 and which do not involve games of chance or gambling and, on the other hand, audio-visual  and cinematographic production and 
broadcasting;  associative activities;  and postal services. 
 
6. Subsidy per unit or, where this is not possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Total amount for 2009:  €902 million and fo r 2010:  €835 million, disbursed pursuant 
to Articles 199 undecies  B and 217 undecies  of the General Taxation Code. 
 
7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 The current scheme is in force until 31 December 2017.  8. Statistical data permitting an assessmen t of the trade effects of the subsidy 
 
 Number of applications approved in 2009:   - Article 199 undecies  B:  246; 
 - Article 217 undecies :  79. 
 
 2010 data not available. 
 
4. Temporary exemption, subject to approval, from corporation tax for the creation of 
activities in French Overseas Departments 
1. Period covered by the notification 
 
 2009 and 2010.  2. General policy objective and/or pur pose of the subsidy (or aid scheme) 
 
 To promote economic development and em ployment in the Overseas Departments. 
 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 Ar ticles 86-I and 86-II of Law No. 2001-1275 of 
28 December 2001. 
  G/SCM/N/220/EEC/Add.9 
 Page 19 
 
 
  4. Form of the subsidy (i.e. gr ant, 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, audio-visual 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 possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Total amount for 2009:  €1 million, and for 2010:  €0. 
 
7. Duration of the subsidy and/or an y 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 assessmen t of the trade effects of the subsidy 
 
 No authorization issued since 2005. 
 
5. Reduced taxation of profits from oper ations in French Overseas Departments 
1. Period covered by the notification 
 
 2009 and 2010. 
 
2. General policy objective and/or pur pose of the subsidy (or aid scheme) 
 
 To promote economic development and em ployment in the Overseas Departments. 
 G/SCM/N/220/EEC/Add.9 
Page 20  
 
  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 . 2009-594 of 27 May 2009 on overseas economic 
development.  4. Form of the subsidy (i.e. gr ant, 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;  cafés, tobacconists and bars/public houses, as well as catering with the exception of restaurants which are run by a person who has been awarded the title of ma ître restaurateur and which have been 
audited for the purposes of the award of that title and, where applicable, tourist 
restaurants which were graded on the date  of publication of Law No. 2009-888 of 
22 July 2009 on the development and modern ization of tourism services;  business 
advisory services and consultancy;  education,  health and social welfare;  banking, 
finance and insurance;  all real estate ac tivities;  the cruise industry, car repair, 
rental/leasing services without operators, with the exception of the direct rental of pleasure boats or to natural persons usi ng, for a period not exceeding two months, 
private motor vehicles within the meaning of Article 1010 of the CGI;  business 
services, with the exception of maintenance,  cleaning, packaging on a toll basis and 
call centres;  leisure, sporting and cultu ral activities, except, 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, audio-
visual and cinematographic production and br oadcasting;  associative activities;  and 
postal services. 
 6. Subsidy per unit or, where this is not possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Total amount for 2009:  €90 milli on, and for 2010:  €90 million. 
 7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 The scheme is applicable to accounting periods closed by 31 December 2017. 
 
8. Statistical data permitting an assessmen t of the trade effects of the subsidy 
 
 Not available.   G/SCM/N/220/EEC/Add.9 
 Page 21 
 
 
  6. Tax reduction for profits from operations Overseas 
1. Period covered by the notification 
 
 2009 and 2010.  
2. General policy objective and/or pur pose of the subsidy (or aid scheme) 
 
 To promote economic development and empl oyment in the Overseas Departments. 
 3. Legal basis (reference, date) 
  Article 44 quaterdecies  of the General Taxation Code, deriving from Article 4 of Law 
No. 2009-594 of 27 May 2009.  4. Form of the subsidy (i.e. gr ant, loan, tax concession, etc.) 
 
 Tax concession.  Tax reduction for profits from operations 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) :  
Small and medium-sized enterprises subject to income tax or corporation tax which 
have operations in the Free Zones for Activities (ZFA) in Guadeloupe, Guyana, 
Martinique and Reunion. 
 
- Allocation mechanism :  Upon option. 
 
- Conditions:   Enterprises operating in Guadeloupe , Guyana, Martinique and Reunion 
qualify for a profits tax reduction if the fo llowing conditions are satisfied:  they 
employ fewer than 250 employees and ha ve an annual turnover of less than 
50 million euros;  the operation's principal activ ity is in one of the sectors eligible for 
the tax reduction provided for in Article 199 undecies  B of the General Taxation 
Code, or is one of the following:  accountancy, business advisory services, 
engineering, technical consultancy.  The en terprise must also be subject to an actual 
tax regime or to one of the regimes defined in Articles 50-0 and 102 ter.  Finally 
(if the amount of the reduction is 500 euros or more), the enterprise must incur expenditure for vocational training and make  a payment to the Experimental Youth 
Development Fund, the minimum spending on these actions being proportional to the 
amount of the tax concession. 
 6. Subsidy per unit or, where this is not possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
Total amount for 2009:  €90 million, 
 for 2010:  €90 million. 
 7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 The scheme is applicable to accounting periods opened by 2017.  
 G/SCM/N/220/EEC/Add.9 
Page 22  
 
  8. Statistical data permitting an assessmen t of the trade effects of the subsidy 
 
 Not available.  
7. Premium for job creation in French Overseas Departments 
1. Period covered by the notification 
 
 2007 and 2008.  2. General policy objective and/or pur pose 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. gr ant, 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 four 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 possi ble, 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 an y 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 assessmen t 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.   G/SCM/N/220/EEC/Add.9 
 Page 23 
 
 
   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. 
 
 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  
1. Measures on behalf of Urban Free Zones (ZFU) 
1. Period covered by the notification 
 
 2009 and 2010.  2. General policy objective and/or pur pose 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 on implementati on of the Urban Regeneration Pact (creation 
of 44 "first-generation" ZFUs on 1 January  1997) 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  on town planning and urban re newal (enterprises established in 
ZFUs on 1 January 2004 or which set up operations in su ch a zone between that date and the date of 
publication of Law No. 2006-396 of 31 March 2006 on equal opportunities), i.e. 3 April 2006. 
  Technical adjustments to the measures under the Amending Finance Law for 2003 No. 2003-1312 of 30 December 2003.  
 The measures created by Article 44 octies  A deriving from the aforementioned Law 
No. 2006-396 ("third-generation" ZFUs) replace the measures provided for by Article 44 octies  which 
ceased to apply to the creation of activities from th e day after the date of publication of the Law on 
equal opportunities, i.e. 3 April 2006.  The exemption codified under Article 44 octies  A is applicable 
to activities created between 1 January 2006 and 31  December 2011 in all ZFUs.  These measures are 
also applicable, within the limits of the old de minimis regulation, to activities already engaged in 
before 1 January 2006 in the new ZFUs establishe d by the Law on equal opportunities.  Activities 
created in "first generation" and "second genera tion" ZFUs between 1 Janua ry and 2 April 2006 May 
be placed under Article 44 octies  or 44 octie s A. 
  Updating of references within Article 44 octies  and Article 44 octies  A (in Article 45 of the 
Amending Finance Law for 2007 No. 2007-1824 of 25 December 2007 and in Article 2 of the 
Finance Law for 2010 No. 2009-1673 of 30 December 2009).  G/SCM/N/220/EEC/Add.9 
Page 24  
 
  4. Form of the subsidy (grant, loan, tax concession, etc.) 
 
Article 44 octies :  Exemption from profits tax for five years, then a reduction of 60 per cent, 
40 per cent and 20 per cent for the first, second a nd third 12-month periods following the exemption 
period.  For enterprises with less than five employees, a reduction of 60 per cent, 40 per cent and 
20 per cent for the first five, the sixth and sev enth, and the eighth and ninth 12-month periods 
following the exemption period. 
 
 Exempt profits cannot exceed €61,000 per taxpayer, per 12-month period. 
 
 In the "first generation" ZFUs, the exemp tion is subject to compliance with Commission 
Regulation (EC) No. 1998/2006 of 15 December 2006 on the application of Articles 87 and 88 of the Treaty to de minimis  aid.  For taxpayers engaging in or creating an activity in one of the "second 
generation" ZFUs before 1 January 2004, exempti on is granted subject to compliance with the 
aforementioned regulation. 
 
 Article 44 octies  A:  Exemption from profits tax for five years, then a reduction of 60 per cent, 
40 per cent and 20 per cent for the first five, the sixth and seventh, and the eighth and ninth 12-month periods following the exemption period, during which the enterprise employs five or more employees. 
  Exempt profits cannot exceed €100,000 per ta xpayer, per 12-month period, increased by 
€5,000 for each new employee hired from 1 January  2006 who is domiciled in a sensitive urban 
zone (ZUS) or ZFU and is employed full-time for a period of at least six months.  For taxpayers 
engaged in activities before 1 January 2006 in the "third generation" ZFUs, exemption is granted 
subject to compliance with Commission Regulatio n (EC) No. 1998/2006 of 15 December 2006 on the 
application of Articles 87 and 88 of the Treaty to de minimis  aid. 
 
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 actual activity in a ZFU and must be 
physically established there, with operating resources for the activity engaged in.  In 
the case of non-sedentary activity establishe d in a ZFU but carried out entirely or 
partially outside of that zo ne, the activity is assumed to be carried out within a ZFU 
when at least one sedentary full-time em ployee 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, new conditions have been established by 
Law No. 2003-1312 of 30 December 2003 regarding payroll numbers, turnover or balance sheet total, holding of capital wh en the enterprise has been set up as a 
company, and the enterprise's sector of activity.  The conditions regarding payroll 
numbers and the holding of capital we re relaxed by Law No. 2005-32 of 
18 January 2005 on planning for social cohesion. 
   These conditions also apply to the new ("third-generation") ZFUs created under Law 
No. 2006-396 of 31 March 2006. 
  G/SCM/N/220/EEC/Add.9 
 Page 25 
 
 
  6. Subsidy per unit or, where this is not possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Total amount for 2009:  €200 million (amount for 2010:  €200 million). 
 
7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Article 44 octies :  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).  These measures are no longer applicable to the creation 
of activities from the day after the date of pub lication of Law No. 2006-396 of 31 March 2006 on 
equal opportunities, i.e. 3 April 2006.   Article 44 octies  A:  Five years of total exemption, then a degressive reduction of 60 per cent, 
40 per cent and 20 per cent over nine years. 
 
8. Statistical data permitting an assessmen t of the trade effects of the subsidy 
 
 Around 23,400 beneficiaries in 2009.  
III. R&D SCHEMES 
A. T
AX CREDIT TO PROMOTE RESEARCH  
1. Period covered by the notification 
 
 2009 and 2010.  
2. General policy objective and/or pur pose of the subsidy (or aid scheme) 
 
 To encourage research activity by enterprises.  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 for certa in research spending by enterprises. 
 
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 :  Automatic, on simple declaration. 
   Tax credit equivalent to 30 per cent of research expenditure for the calendar year up 
to a ceiling of €1 million;  reduced to 5 per cent for the portion of research expenditure 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 G/SCM/N/220/EEC/Add.9 
Page 26  
 
  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, in prin ciple the maximum tax credit for research is 
€200,000 over a period of three financ ial years, in accordance with the de minimis  
rule in Commission Regulation No. 1998/2006 of 15 December 2006.  However, for aid granted in 2009 and 2010, this ceiling h as been raised to €500,000 (Article 14 of 
the Amending Finance Law for 2009 No. 2009-122 of 4 February 2009). 
 
 - Conditions :  Submission of a declaration indicating the amount of the research 
expenditure incurred by the enterprise over the calendar year. 
 6. Subsidy per unit or, where this is not possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Total amount for 2009:  €6,200 m illion and for 2010:  €4,500 million. 
  The reason for this significant increase in fi scal expenditure is that the economic recovery 
plan put in place in France at the end of 2008 in troduced certain mechanisms to support the cash 
flows of enterprises in a difficult macro-economic environment.  
 In principle, the research tax credit is set off against the profits tax due for the year when the 
research expenditure was incurred.  For the enterp rise, any tax credit in excess of the profits tax 
constitutes a receivable from the State, in the same  amount, which is used to pay the profits tax due 
for the three years following the year for which it was recorded.  The portion of the tax credit which 
remains unused at the end of this period is repa id.  For certain categories of enterprises (new 
enterprises, failing enterprises, young innovative enterp rises…), the research ta x credit receivable is 
repaid immediately.   However, Article 95 of the Amendi ng Finance Law for 2008 No. 2008-1443 of 
30 December 2008 established two temporary schemes for the early repayment of research tax credit receivables for all enterprises, in order to support their cash flows at a time of economic crisis: 
 
- A mechanism for the immediate repayment of research tax credit receivables 
calculated in respect of research expenditu re incurred during 2005, 2006, 2007 and 
2008 (enterprises do not have to await the e xpiry of the period referred to above to 
have their research tax credit receivables repaid to them); 
 
- and a mechanism for the "accelerated" repayment of an estimate of the research 
tax credit receivable for 2008 (this repaym ent of an estimated amount could be 
requested as of January 2009). 
 
 These two mechanisms were extended for a peri od of one year by Article 5 of the Finance 
Law for 2010 No. 2009-1673 of 30 December 2009, and were therefore applicable to research tax 
credit receivables recorded (or estimated) for 2009.   In contrast, by application of Article 41 of the Finance Law for 2011 No. 2010-1657 of 
29 December 2010, the mechanism for repaying an estimate of the research tax credit receivable 
("accelerated" repayment) has not been extended for tax credits calculated for 2010 and following 
years.  However, the mechanism for the immediate repayment of the research tax credit receivable has 
been extended to enterprises that come within the definition of sm all and medium-sized enterprises  G/SCM/N/220/EEC/Add.9 
 Page 27 
 
 
  under Community law (enterprise with less than 250 employees and with a turnover not exceeding 
€50 million or a balance sheet total not exceeding €43 million).  Therefore, the ordinary law scheme described above is once again applicable for othe r enterprises (with the exception of the enterprises 
referred to above which were already benefitting fro m the immediate repayment of their receivables 
in respect of the tax credit for research expenditure). 
 
7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Indefinite period.  
8. Statistical data permitting an assessmen t 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. 
 
B. NATIONAL RESEARCH AGENCY (ANR) 
1. Period covered by the notification 
 
 2005 to 2010.  
2. General policy objective and/or pur pose 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 the 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.  
 Regulations of 28 February 20 05 relating to the 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. gr ant, 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); G/SCM/N/220/EEC/Add.9 
Page 28  
 
   
 - 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.  Forty-nine calls for projects, 18 of which were open to international bidders, were 
launched in 2010. 
 
  In 2010, 9.8 per cent of the grants we nt to enterprises and 85 per cent to public 
research institutions. 
   The distribution of grants by type of beneficiary has hardly changed since the creation 
of the ANR in 2005. 
 6. Subsidy per unit or, where this is not possi ble, 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; 
 2009 :  €650.1 million, including 79.5 allocated to enterprises; 
 2010 :  €629.3 million, including 62.4 allocated to enterprises. 
 7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Permanent arrangement. 
 
8. Statistical data permitting an assessmen t 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.  C. F
UND FOR ENTERPRISE COMPETITIVENESS (FCE) 
1. Period covered by the notification 
 
2009 and 2010. 
 2. General policy objective and/or pur pose 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. 
  G/SCM/N/220/EEC/Add.9 
 Page 29 
 
 
   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. gr ant, 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 million 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:  
- 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 possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Budget: 2008: €209,532,000 
2009: €246,502,000 2010: amount not available. 
 7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Permanent arrangement funded on a yearly basis under the Finance Law. 
 G/SCM/N/220/EEC/Add.9 
Page 30  
 
  8. Statistical data permitting an assessmen t 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.  D. OSEO
 INNOVATION AID SCHEME FOR RESEARCH , DEVELOPMENT AND INNOVATION (RDI) 
1. Period covered by the notification 
 
2009 and 2010. 
 2. General policy objective and/or pur pose 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. gr ant, 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.  
  G/SCM/N/220/EEC/Add.9 
 Page 31 
 
 
   - 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). 
 
 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 possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
Budget: 2008: €110,227,000 
 2009: €91,480,000  2010: amount not available. 
 7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Permanent arrangement funded on a yearly basis under the Finance Law. 
 8. Statistical data permitting an assessmen t 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/SCM/N/220/EEC/Add.9 
Page 32  
 
  E. I
NDUSTRIAL INNOVATION AGENCY AID FOR INDUSTRIAL INNOVATION PROMOTION 
PROGRAMMES (PMII) 
1. Period covered by the notification 
 
2009 and 2010. 
 
2. General policy objective and/or pur pose 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. gr ant, 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. 
 
 Industrial research stages:  subsidies. 
 5. Beneficiaries of the aid and allocation mechanism (calculation method and conditions) 
 
 Beneficiaries (who receives the subsidy, the producer, the exporter, other) :  Large 
industrial enterprises, SMEs and research laboratories. 
 
 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 fo r small and medium-sized enterprises, 
respectively; 
 
  - plus 15 percentage points for collaborative activities. 
 6. Subsidy per unit or, where this is not possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Budget: 2008: €131.4 million 
 2009: €177 million  2010: amount not available.   G/SCM/N/220/EEC/Add.9 
 Page 33 
 
 
  7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 Permanent arrangement funded on a yearly basis under the Finance Law. 
 8. Statistical data permitting an assessmen t 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. 
 F. A
ID TO RESEARCH INSTITUTIONS IN THE CIVIL AVIATION SECTOR  
1. Period covered by the notification 
 
 2009 and 2010. 
 
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.  6. Total amount 
 
 In 2009:  €6 million 
 In 2010:  €8 million  7. Duration of the subsidy 
 
 Permanent scheme funded on an annual basis under the Finance Law. 
 G/SCM/N/220/EEC/Add.9 
Page 34  
 
  8. Statistical data 
 
 The entities concerned are non-profit-making.  G. C
IVIL AVIATION RESEARCH  
1. Period covered by the notification 
 
 2009 and 2010.  2. Policy objective 
  The overall objective of the research is to develop knowledge which improves the 
technological base in order to enhance the e nvironmental performance of air transport. 
  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).  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, 25 ente rprises were involved in 2009 and 26 in 2010. 
 
6. Total amount 
  2009:  €120.1 million  2010:  €119.8 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.  H. Y
OUNG INNOVATIVE ENTERPRISES (JEI) 
1. Period covered by the notification 
 
 2009 and 2010.   G/SCM/N/220/EEC/Add.9 
 Page 35 
 
 
  2. General policy objective 
 
 To support young innovative enterprises undertaking R&D projects.  3. Legal basis 
  Article 44 sexies -0 A of the General Taxation Code , deriving from Law No. 2003-1311 of 
30 December 2003, as amended by Article 24 of  the Finance Law for 2005 No. 2004-1484 of 
30 December 2004, by Article 107 of the Amending Finance Law for 2005 No. 2005-1720 of 
30 December 2005, by Article 46 of the Ame nding Finance Law for 2007 No. 2007-1824 of 
25 December 2007 and Article 71 of the Finance Law for 2008 No. 2007-1822 of 24 December 2007. 
  Article 44 sexies  A, deriving from Law No. 2003-1311 of 30 December 2003, as amended by 
Article 41 of the Amending Finance Law for 2004 No. 2004-1485 of 30 December 2004 and Article 
45 of the Amending Finance Law for 2007 No. 2007-1824 of 25 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 th e following two years of profitable business. 
 
 Exemption granted to enterprises eligible for JE I status and the related advantages is subject 
to compliance with European Commission Regula tion (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 employing fewer than 
250 employees and having a turnover of less th an €40 million for the financial year or 
a balance sheet total of less than €27 million,  established for less than eight years, at 
least 50 per cent of whose share capital is directly or indirectly held continuously by natural persons or by certain exhaustively listed enterprises involved in the venture 
capital sector: 
 
- which incur research and development spending representing at least 15 per 
cent of their tax-deductible costs; 
 
- or which qualify as "young university enterprises". 
 
- Allocation mechanism :  By operation of law. 
 
- Conditions :  Enterprise not created within the framework of the concentration, 
re-structuring, or extension of pre-existi ng activities or resumption of such activities. 
 
 A "young university enterprise" is an enterprise which meets the payroll number, 
turnover and capital holding conditions set out above, and:  - is at least 10 per cent owned or managed directly by students, persons holding 
a master's degree or doctoral degree awarded less than five years previously, 
or persons engaged in teaching or research activities; 
 - has as its principal activity the promotion of research work in which the 
managers or partners ha ve participated during their studies or in the G/SCM/N/220/EEC/Add.9 
Page 36  
 
  performance of their duties, in a hi gher education establishment entitled to 
award degrees at master's level at least; 
 - has entered into a specific agreement wi th the higher education establishment. 
 
6. Total amount 
 
 Total amount for 2009:  €18 milli on, and for 2010:  €18 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 2009.  However by wa y of exception, these measures also apply 
to financial years commencing on or after 1 January 2008 for enterprises which, in 
2008, entered into an agreement with a hi gher education establishment in accordance 
with the provisions of Decree No. 2008-15 60 of 31 December 2008 on agreements 
between young innovative enterprises and higher education establishments for the 
application of Article 44 sexies -0 A of the General Taxation Code. 
 
8. Statistical data 
 
 Around 600 beneficiaries in 2009.  
IV. SECTORAL REGIME 
A. T
ONNAGE -BASED TAX SCHEME  
1. Period covered by the notification 
 
 2009 and 2010.  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.   G/SCM/N/220/EEC/Add.9 
 Page 37 
 
 
  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. 
 
 - Allocation mechanism :  Upon option by the enterprise made for a period of 
ten years. 
  - Conditions :  Operation of merchant vessels of  a minimum tonnage (over 50 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 possi ble, total amount or annual amount budgeted for 
the subsidy (indicating, if possible, the average subsidy per unit in the previous year) 
 
 Total amount for 2009:  €40 milli on, and for 2010:  €45 million). 
 7. Duration of the subsidy and/or an y other time-limits attached to it 
 
 This scheme has been in effect since 1 January 2003.  8. Statistical data permitting an assessmen t of the trade effects of the subsidy 
 
 None. 
 
__________