Breakthrough Young Innovative Company (JEIR) France 2026: Conditions and Tax Benefits

Up to date as of 12 May 2026. The Jeune Entreprise Innovante de Rupture (JEIR, Breakthrough Young Innovative Company) is a category of the French JEI (Jeune Entreprise Innovante) tax status, introduced by the French Finance Act 2024 (loi n° 2023-1322 of 29 December 2023). Its defining criterion is a higher R&D intensity threshold: at least 30% of fiscally deductible expenses must relate to research and development activities, compared to 20% for the standard JEI.

Let us state at once the point that does the most damage to financial plans: the JEIR opens no exemption from tax on profits. The corporate income tax exemption attached to JEI status was abolished by that very Finance Act 2024 for every company created from 1 January 2024. It survives only for companies created up to 31 December 2023. The JEIR, a category born in 2024, therefore post-dates the abolition by construction: no company can claim a "JEIR corporate tax exemption". What the JEIR genuinely delivers is the 50% enhanced rate of the income tax reduction for individuals subscribing to its capital (CGI Article 199 terdecies-0 A bis), against 30% for a standard JEI, together with access to the employer social contribution exemption on R&D staff.

For a Paris-based startup or SME with strong technological content, choosing between JEI and JEIR is therefore not a corporate tax question: it is a decision that bears on the cost of the R&D payroll and on the attractiveness of the share capital to business angels, and it requires solid analytical accounting to withstand a combined DGFiP/URSSAF audit.

The JEI regime is codified in Article 44 sexies-0 A of the French General Tax Code (CGI). The Finance Act 2024 (loi n° 2023-1322) introduced three key changes:

1. A new category, the JEIR, with an R&D intensity threshold of 30% of deductible expenses, opening an enhanced income tax reduction for investors (CGI Article 199 terdecies-0 A bis).
2. A reduction in the maximum age of eligibility from 11 to 8 years, applicable to financial years opened from 1 January 2024.
3. The abolition of the exemption from tax on profits for every company created from 1 January 2024. The benefit is preserved only for companies created up to 31 December 2023 (100% of the first profitable year, then 50% of the following one).

Two later texts complete the framework. The Act of 28 February 2025 (Article 22) raised the standard JEI R&D threshold from 15% to 20% of tax-deductible charges, the former threshold applying only to financial years ended before 1 March 2025. The 2026 Finance Act (Law No. 2026-103 of 19 February 2026) created the JEII (young impact-innovation company), not to be confused with the JEC, and extended the local tax exemptions to companies created up to 31 December 2028. It is the JEII, and it alone, that is repealed on 1 January 2029: the JEI status itself does not expire on that date.

The JEIR is not a separate article in the CGI; it is distinguished within Article 44 sexies-0 A by the 30% threshold, and it is Article 199 terdecies-0 A bis that carries its own benefit, the 50% income tax reduction for subscribers. Local tax exemptions are addressed under Articles 1383 D and 1466 D (land tax and CFE), and social contribution exemptions derive from Law n° 2003-1311.

Caveat: do not rely on content written in early 2024, when the administrative doctrine had not yet been published. BOFiP has since been updated (BOI-BIC-CHAMP-80-20-20-10, update ACTU-2026-00067) and it confirms the abolition of the exemption from tax on profits for companies created after 31 December 2023.

All five conditions must be met simultaneously. Failing any one of them disqualifies the company from JEIR status.

1. Size criterion: EU-definition SME#

The company must employ fewer than 250 employees AND have annual turnover below or equal to €50 million OR a balance sheet total below or equal to €43 million. These are the thresholds of the EU SME definition (European Commission Recommendation 2003/361/EC). A mid-cap company that exceeds either threshold cannot claim JEIR status regardless of R&D intensity.

2. Age criterion: less than 8 years (Finance Act 2024 change)#

The company must be less than 8 years old on 1 January of the tax year. Finance Act 2024 reduced this limit from 11 to 8 years. Companies created in 2018 reaching their 8-year mark in 2026 must check whether they remain eligible based on the exact opening date of their financial year.

3. Capital independence criterion#

At least 50% of the capital and voting rights must be held, directly or indirectly, by: natural persons, other JEI-status companies, publicly recognised scientific research foundations or associations, public research bodies, or eligible venture capital vehicles (French FCPI or FIP funds). This criterion is designed to exclude subsidiaries of established industrial groups. Any investment round admitting non-eligible institutional investors risks pushing eligible ownership below 50%.

4. Genuine creation criterion#

The company must be genuinely newly created — not resulting from a merger, restructuring, extension of a pre-existing activity, or takeover of an activity previously carried out by another business. DGFiP controls this criterion: a spin-off that absorbs assets or teams from an existing entity may be requalified.

5. R&D intensity criterion: >= 30% of deductible expenses (JEIR threshold)#

This is the distinguishing criterion. R&D expenditure, as defined in Article 244 quater B of the CGI (same scope as the Research Tax Credit), must represent at least 30% of total fiscally deductible expenses for the year. That is well above the standard JEI threshold, set at 20% since the Act of 28 February 2025 (15% for financial years ended before 1 March 2025 only). Eligible categories include: amortisation of assets assigned to R&D (taken at 100%), R&D personnel costs (researchers, technicians), the remuneration of directors working directly on R&D operations, lump-sum operating costs (40% of R&D personnel costs plus 75% of amortisation charges), and R&D sub-contracting with approved organisations.

Two lists that must no longer be copied. The 2025 Finance Act removed from the base, for expenditure incurred from 15 February 2025, patent costs (filing, maintenance, defence) and plant variety certificates, as well as technology watch expenses (the former EUR 60,000 annual cap no longer exists). It also abolished the favourable "young doctorate holder" regime. The lump-sum operating allowance was cut from 43% to 40% of personnel costs: any base built on 43% overstates the credit and invites a reassessment.

Our view: The 30% threshold requires robust analytical accounting and rigorous time-tracking. In the client files we handle at Hayot Expertise in Paris, deeptech startups (AI, biotech, medtech, semiconductors) naturally reach this level. Conventional SaaS companies with lean R&D teams typically plateau between 20% and 25%, which places them at the standard JEI level and not at the JEIR level. With the JEI threshold moving from 15% to 20%, that zone has become critical: a company at 17% R&D, eligible yesterday, is no longer eligible today, and should examine the JEC qualification (R&D between 5% and 20% with performance indicators).

Sources: CGI Art. 44 sexies-0 A and 199 terdecies-0 A bis; Finance Act 2024 n° 2023-1322; Act of 28 February 2025 (threshold raised to 20%); BOFiP BOI-BIC-CHAMP-80-20-20-10.

There is no JEIR exemption from tax on profits#

This is the correction we make most often to the business plans submitted to us. The exemption from tax on profits (100% of the first profitable year, then 50% of the following one) was abolished by the 2024 Finance Act for every company created from 1 January 2024.

The JEIR is a category created by that same 2024 Finance Act. No company can therefore invoke JEIR qualification in 2026 to claim a corporate income tax exemption:

• a company created up to 31 December 2023 retains, where applicable, the benefit of the former exemption, but it holds it by virtue of being a JEI, not a JEIR;
• a company created from 1 January 2024 has no entitlement whatsoever to an exemption from tax on profits, whatever its R&D intensity, even at 60% or 80% of charges.

An exceptional R&D intensity does not redeem an incorporation date after 31 December 2023. It is a rule of date, not a rule of merit.

The 50% investor income tax reduction: the JEIR's own benefit#

This is the whole point of the category. Article 199 terdecies-0 A bis of the CGI grants individuals who subscribe in cash to the capital of a JEIR an income tax reduction equal to 50% of the payments made, against 30% for a JEI or a JEC, and 40% for a JEII. The subscriptions concerned are those made from 1 January 2024 to 31 December 2028.

Payments are taken into account within a limit of EUR 50,000 for a single person and EUR 100,000 for a couple filing jointly (EUR 75,000 and EUR 150,000 through an FCPI fund invested in JEI companies).

This benefit does not go into the company's pocket: it goes into its subscribers'. But for a deeptech raising from business angels, it is a first-rank argument, and it is precisely what the legislator intended to create with the JEIR.

Business property tax (CFE) exemption#

Article 1466 D CGI allows local authorities to pass a resolution granting a CFE exemption for up to 7 years. This is not automatic: it requires an explicit local authority resolution. Article 40 of the 2026 Finance Act extended the scheme to companies created up to 31 December 2028. Paris-based companies should verify whether the relevant municipality has adopted such a resolution and under what conditions.

Land tax exemption#

Article 1383 D CGI provides an equivalent option for land tax on built properties. Again subject to local authority resolution. Relevant primarily for companies that own their laboratory premises; tenant companies in Paris are not directly affected.

Scope of the exemption#

The JEIR exemption covers employer contributions for employees and corporate officers assigned to R&D work. Eligible roles: researchers, R&D technicians, R&D project managers, intellectual property lawyers, staff in charge of pre-competitive testing, and corporate officers who directly and predominantly work on R&D. The exemption applies to the employer share of social security contributions (sickness, maternity, disability, death, old-age) and family allowance contributions. It is full and non-degressive, and runs until the last day of the seventh calendar year following the year of incorporation, for companies created no later than 31 December 2028.

What remains due: AT/MP (work accident and occupational disease) contributions are not exempt, contrary to what is often written. Unemployment insurance, supplementary pension, FNAL, the autonomy solidarity contribution, CSG/CRDS and the transport levy also remain due.

2026 caps and the real value of the exemption#

Two caps apply in 2026: EUR 8,401.58 of gross monthly pay per employee (4.5 times the SMIC) and EUR 240,300 per establishment per calendar year (five times the PASS, the 2026 PASS being EUR 48,060).

Since 1 January 2026, the reduced sickness and family allowance contribution rates have been abolished: contributions are due at the full rate whatever the salary. The exempted employer rates are therefore sickness 13%, family allowances 5.25%, capped old-age 8.55% (within the monthly ceiling of EUR 4,005) and uncapped old-age 2.11%.

In practice: for an R&D engineer paid EUR 50,000 gross per year (EUR 4,166.67 per month), the exemption is worth roughly EUR 1,191 per month, that is roughly EUR 14,300 per year, or about 28% of gross pay. For a deeptech startup with 3 employees assigned to R&D at that salary level, the annual exemption therefore reaches approximately EUR 43,000, and approximately EUR 57,000 with 4 employees. At the 4.5-SMIC cap, the relative weight falls back to about 24% of gross pay. The order of magnitude to remember is 24% to 28% of gross pay, within the limit of EUR 240,300 per establishment per year.

De minimis ceiling: EUR 300,000, and it does not cover the social exemption#

Two corrections are needed here, because this point is very frequently misstated.

First the amount: the de minimis ceiling is EUR 300,000 over three rolling fiscal years since Regulation (EU) 2023/2831 took effect on 1 January 2024. It replaced the EUR 200,000 ceiling of Regulation n° 1407/2013, which is no longer in force.

Second the scope: the JEI/JEIR employer contribution exemption is not subject to the de minimis ceiling. It is the tax exemptions attached to the status that are. A startup that has used up its de minimis envelope with Bpifrance or regional grants therefore does not lose its social contribution exemption, which is today its principal lever. Tracking the ceiling remains useful for the other forms of aid, and Hayot Expertise integrates it into annual JEIR client reviews.

CIR compatibility#

JEIR status is fully compatible with the Research Tax Credit (CIR, CGI Article 244 quater B). Both mechanisms may cover the same R&D expenses but operate through distinct calculations. The CIR reduces corporate income tax or generates a tax receivable that is immediately refundable for an SME, which every JEIR is: a genuine cash lever in the early stage.

Two illusions to discard. There is no longer any exemption from tax on profits to articulate with the CIR for a company created from 1 January 2024: that exemption no longer exists. And there is no enhanced CIR rate under JEI or JEIR status: the CIR remains at 30% up to EUR 100 million of eligible expenditure and 5% beyond, for every company. The 50% rate applies to expenditure incurred in the French overseas départements, and to nothing else. Nor is there any 50% CIR "for SMEs in their early stage", and no CIR rate tied to rural revitalisation zones.

Poor documentation exposes both the CIR and the JEIR status to simultaneous reassessment.

CII compatibility#

The Innovation Tax Credit (CII) is similarly compatible. It is reserved for SMEs within the EU definition, at 20% of eligible expenditure in mainland France (60% in the overseas départements, 35% or 40% in Corsica), within an annual base of EUR 400,000, a maximum credit of EUR 80,000 per year. It is extended until 31 December 2027.

No enhancement of the CII exists under JEI or JEIR status. Claims such as "CII raised to 30% for JEI companies" or "cap increased to EUR 120,000 for JEI companies" are false: they correspond to no legal text.

The distinction between CIR-eligible expenses (fundamental research, applied research, experimental development) and CII-eligible expenses (product innovation) must be rigorously documented to avoid double-counting.

Bpifrance: French Tech Grant and Innovation Aid#

JEIR status is a facilitating (though not sufficient) factor for Bpifrance instruments: Bourse French Tech, Aide Individualisee a l'Innovation (AI), and innovation loans. Not all Bpifrance instruments are de minimis aids in the technical EU sense (repayable loans are debt instruments). Each instrument's classification should be verified when building a financing package.

The underestimated risk: combined DGFiP / URSSAF audit#

DGFiP and URSSAF share information on JEI/JEIR status. An URSSAF payroll audit that challenges the employer contribution exemptions can trigger a DGFiP referral, which then re-examines the tax schemes resting on the same R&D work: the research tax credit (CIR), the innovation tax credit (CII), and the CFE and property tax exemptions granted by local authority resolution. There is, on the other hand, no corporate income tax exemption left to challenge for a company created from 1 January 2024: that exemption was abolished by the 2024 Finance Act and survives only for companies created up to 31 December 2023. The resulting double reassessment, social and fiscal, across several financial years, is the most significant risk in this area and one that is frequently underestimated by startup founders. Analytical accounting for R&D must simultaneously satisfy both administrations' documentation requirements.

Most frequent audit findings#

• Insufficient R&D documentation: no laboratory notebooks, no signed time-sheets by project, no progress reports.
• Improper staff classification: sales or support staff wrongly allocated to R&D roles to inflate the R&D expense base.
• Capital independence breach: non-eligible investor entry that pushes eligible ownership below 50%.
• Genuine creation challenge: subsidiary created to restart a JEI clock on an existing activity.
• De minimis ceiling breach: multiple aid sources not consolidated in a single tracking register.

Situation: SAS incorporated in Paris in 2022, 5 employees (3 R&D engineers, 1 sales, 1 technical CEO), 2025 turnover €380,000, balance sheet total €520,000. Fiscally deductible expenses 2025: €640,000, of which €385,000 are R&D expenses per analytical accounts (60% ratio). Capital: 75% held by the two founders (natural persons), 25% by an approved FCPI.

JEIR analysis:

• SME: yes (< 250 employees, turnover < €50M, balance sheet < €43M)
• Age: created 2022, 2025 = year 3. Well within the 8-year limit.
• Capital independence: 75% natural persons + 25% FCPI = 100% eligible holders. Criterion satisfied.
• Genuine creation: incorporated ex nihilo, no activity takeover.
• R&D intensity: 60% > 30%. JEIR criterion satisfied.

Conclusion: the company qualifies as JEIR for financial year 2025.

Watch the incorporation date, which changes everything here. Incorporated in 2022, therefore before 31 December 2023, the company still falls under the former regime: if 2025 is its first profitable year, it may claim the exemption from tax on profits (100%, then 50% the following year). But it holds that right as a JEI created before 2024, not as a JEIR: a strictly identical company incorporated in 2024 would have no exemption from tax on profits at all, despite its 60% R&D intensity.

Quantifying the social exemption, with the assumption stated explicitly: the 3 R&D engineers are each paid EUR 50,000 gross per year. The exempted contributions (sickness 13%, family allowances 5.25%, capped old-age 8.55% within the EUR 4,005 monthly ceiling, uncapped old-age 2.11%) amount to roughly EUR 1,191 per month per employee, that is roughly EUR 14,300 per year per employee and approximately EUR 43,000 per year in total. The EUR 240,300 per-establishment cap is nowhere near being reached.

The fundraising lever: as a JEIR, the individuals who subscribe to its next capital increase will benefit from an income tax reduction of 50% of their payments (within a limit of EUR 50,000 for a single person, EUR 100,000 for a couple). That is the argument to put in front of business angels.

CIR stacking on the same R&D base is to be processed separately via Form 2069-A: 30% of eligible expenditure, immediately refundable as an SME.

Recommended approach by Hayot Expertise: formalise analytical R&D accounting, prepare a tax ruling application before the first JEIR declaration, and track the consolidated de minimis ceiling (EUR 300,000 over three rolling fiscal years) for the aid that is subject to it, bearing in mind that the social exemption is not.

1. Reaching the 8-year age limit: the expected "normal" exit. Plan for this 12 to 18 months in advance to adapt the financing plan and identify replacement mechanisms (CIR, CII, enterprise zones if applicable).
2. Loss of capital independence: any funding round admitting a non-eligible investor must be checked against the 50% threshold before signing. This requires coordination between the M&A lawyer and the accountant, a process cabinet Hayot Expertise supports for its Paris-based clients.
3. R&D intensity falling below 30%: as the company scales and operational and commercial costs grow faster than the R&D envelope, the ratio may fall below the JEIR threshold. The company may then qualify for the standard JEI if it still reaches 20% of tax-deductible charges, or for the JEC if its ratio sits between 5% and 20% and it meets the economic performance indicators. What it actually loses on leaving the JEIR is not an exemption from tax on profits (there is none), but the 50% enhanced rate of the income tax reduction for its future subscribers, which drops back to 30%.

A successful JEIR file is not built in a single month. Our recommended operating cadence covers four quarterly reviews and one annual close, embedding the JEIR requirements in the normal accounting calendar.

Quarter 1: framing and analytical accounting setup#

In the first quarter of the financial year, the team formalises the R&D project portfolio, opens dedicated analytical sections for each project, and parametrises the time-tracking tool (we typically use a simple spreadsheet or a SaaS such as Toggl for early-stage companies, with custom fields for project, phase and CIR-eligibility flag). The chart of accounts is reviewed to ensure that R&D-related expense accounts (614x, 615x, 622x for research subcontracting, 641x for R&D headcount) are correctly mapped.

Quarter 2: mid-year R&D intensity check#

By the end of the second quarter, the company computes a provisional R&D intensity ratio based on year-to-date expenses. If the ratio is trending below 30%, the management team has six months to take corrective action: accelerating R&D hiring, reclassifying genuinely mixed roles, or deferring non-R&D spend. Below 30%, the company falls back to the standard JEI threshold of 20% (raised from 15% by the Act of 28 February 2025), and below 20% it should examine the JEC qualification, which runs from 5% to 20% with economic performance indicators.

Quarter 3: pre-closing tax positioning#

The third quarter is the right moment to discuss the year-end position with the chartered accountant. Careful here: the exemption from tax on profits is no longer available to any company created from 1 January 2024, so for a recently incorporated startup there is nothing to model on that front. Only companies created up to 31 December 2023 still carry the old benefit (100% on the first profitable year, then 50%). What must be modelled in every case is the interaction between the CIR refund, which is immediate for an SME, and the cash profile of the coming year.

Quarter 4: annual close and de minimis consolidation#

At year-end, the team consolidates: (i) the audited R&D expense base, (ii) the URSSAF exemptions obtained during the year, (iii) any Bpifrance grant treated as de minimis, and (iv) any other public aid received. The cumulative figure of the aid subject to the ceiling is compared with the EUR 300,000 ceiling over three rolling fiscal years (Regulation EU 2023/2831). Note that the JEI/JEIR employer contribution exemption is not subject to that ceiling and therefore does not enter the calculation. If the company is approaching the ceiling on its other aid, the next year's planning must adjust accordingly.

Annual filing and JEI/JEIR-specific declarations#

The JEIR status itself does not require an annual specific declaration to the DGFiP, but the company indicates the regime in its corporate tax return (form 2065) and in the related schedules. The URSSAF exemptions are activated through the monthly DSN with a dedicated CTP code. A mismatch between the corporate tax return and the DSN entries is a frequent red flag during audit.

For foreign entrepreneurs considering an incorporation in France, the JEIR regime should be compared with comparable schemes in other jurisdictions to put the French offer in context.

UK R&D tax relief#

The UK SME R&D tax relief, reshaped in 2024, provides an enhanced deduction or a payable credit on qualifying R&D expenditure, with rates updated by the UK Spring Budget. The UK scheme is more focused on cash refund through HMRC than on a parallel social contribution exemption. The French offer must be described accurately: for a company created from 1 January 2024, it no longer includes an exemption from tax on profits. It combines a payroll exemption (roughly 24% to 28% of gross pay for R&D staff, within EUR 240,300 per establishment per year) with a stackable CIR at 30%, immediately refundable for an SME. That combination remains structurally powerful when the company carries a significant R&D headcount, but it is a payroll-and-cash advantage, not a corporate tax holiday.

US Qualified Small Business Stock (QSBS, Section 1202)#

The US QSBS exemption provides up to 100% exclusion of capital gain on the sale of qualifying small business stock held for more than five years, subject to caps. It is an exit-time benefit rather than an ongoing operating one. For founders comparing jurisdictions, the structural decision is whether to optimise for ongoing cash savings during the build phase (JEIR) or for capital gain treatment at exit (QSBS).

Practical implication for cross-border founders#

A founder considering whether to incorporate in France can frequently combine multiple regimes by having a French operating company (SAS or SASU) eligible for JEIR and CIR, and a parent holding structure abroad that aligns with the founder's personal tax residence. The cross-border structuring requires careful coordination between French and foreign counsel to avoid permanent establishment and transfer pricing issues. Hayot Expertise often works alongside US, UK or Israeli counsel on such structures.

Three operational points consistently arise in JEIR files at Hayot Expertise:

Documentation is the real barrier to entry. Reaching 30% R&D in expenses is not enough without proof. A quarterly R&D analytical dashboard with signed timesheets from assigned staff is the operational minimum.

The tax ruling is not optional for material stakes. A startup anticipating multi-year payroll contribution exemptions, or about to announce a 50% income tax reduction to its investors, should systematically file a ruling request with the business tax office before declaring JEIR status. Articles L 80 A and L 80 B of the French Tax Procedures Book govern this process. Cabinet Hayot Expertise prepares and files these ruling applications for its Paris clients.

Never build a financial plan on an exemption from tax on profits. This is the costliest mistake we see: a business plan that books a corporate income tax saving under JEIR status, when that exemption has disappeared for every company created from 1 January 2024. The right reflex is to quantify the real levers: the employer contribution exemption (in the order of 24% to 28% of the gross pay of R&D staff, within EUR 240,300 per establishment per year), the CIR at 30% immediately refundable, and the CII at 20% within a EUR 400,000 base. For the aid that is subject to it, the de minimis ceiling to monitor is EUR 300,000 over 3 rolling fiscal years (Regulation EU 2023/2831), the social exemption falling outside that calculation.

A typical 24-month JEIR roadmap for a Paris deeptech startup#

For a deeptech startup incorporated in Paris and planning a Series A round in 18 to 24 months, the typical roadmap looks like this:

• Months 1 to 3: incorporation, capital table verification, R&D project portfolio setup, analytical accounting parameters.
• Months 4 to 6: first quarterly R&D ratio check, tax ruling preparation, first URSSAF DSN with JEIR exemption codes.
• Months 7 to 9: tax ruling filing, mid-year R&D intensity review, Bpifrance instrument scoping.
• Months 10 to 12: annual close, de minimis ceiling consolidation, corporate tax return, and CIR claim for the year.
• Months 13 to 18: ongoing quarterly monitoring, CIR file preparation for the prior year, fundraising preparation including JEIR status as a value driver in the data room.
• Months 19 to 24: Series A closing with attention to capital independence threshold, post-money structuring to preserve eligibility, alignment of the financing strategy with the eight-year window.

This article is provided for general information purposes only. It does not replace a personalised analysis by a chartered accountant. Contact cabinet Hayot Expertise in Paris for any specific situation.

Sources: Légifrance (CGI Art. 44 sexies-0 A and 199 terdecies-0 A bis; Law n° 2023-1322 of 29 December 2023; Act of 28 February 2025; Law n° 2026-103 of 19 February 2026); BOFiP BOI-BIC-CHAMP-80-20-20-10; URSSAF jeune entreprise innovante; entreprendre.service-public.fr; Bpifrance.