Financing

Green Industries Tax Credit (C3IV): everything you need to know

4.3.2024
3
min.
Discover the associated resource
Lauriane Novac
Project manager in innovation financing. Expert in taxation.

As part of the green industry bill, the green industry investment tax credit (C3IV) supports green innovation projects.

‍TheGreen Industry Investment Tax Credit, where does it come from?

From the Green Industry Bill to the Finance Bill 2024

The government's Industrie Verte bill and then the 2024 Finance bill (PLF) have brought their share of novelties to the world of financing innovation and the ecological transition. Among the PLF's key measures, such as the new JEICstatus, is the new tax credit for investment in green industry, better known by its French acronym C3IV!

After a legislative process marked by numerous amendments, the text was finally validated. Its adoption by Parliament was followed by its promulgation on December 29, 2023 by the President of the Republic.

On January 8, the European Commission officially validated this state aid after verifying its compliance with European rules on aid to companies, under the "Temporary Crisis and Transition Framework". This temporarily limited framework (until December 31, 2025) relaxes the rules on national public aid to companies in order to finance post-covid recovery and ecological transition.

In this way, the C3IV, a particularly attractive incentive scheme, marks an important step in accelerating France's green reindustrialization towards a low-carbon economy.

This aid should represent 2.9 billion euros of public investment over the period of application of the scheme, i.e. until 2030.

What is C3IV?

A tax system operated by the DGFIP and studied by ADEME

C3IV aims to support investment in four key green industry sectors: battery production, solar panels, wind turbines (onshore and offshore) and heat pumps.

These sectors are essential to the decarbonization and greening of our economy, bringing France into line with ambitious European environmental objectives. Indeed, France's ambition is to significantly increase the share of of renewable in its energy mix, which cannot be achieved without massive investment in these technologies.

The other key sectors of the transition, such as hydrogen and carbon sequestration, are more likely to be supported by the France 2030 funding plan through calls for projects: ADEME - Hydrogen technology bricks and demonstrators. Of course, it is possible to combine several schemes to finance your investments, provided that you don't subsidize the same expense twice, and that you comply with the ceilings (see below).

What are the maximum tax credit rates and amounts?

Expenditure eligible for C3IV is supported at between 20% and 60%. More precisely, the basic rate of this tax credit is 20%, but it can be increased to between 25% and 60% depending on the size of the company and its location. In fact, regional development zones1 (AFR) and outermost regions2benefit from higher rates.

Aid ceilings are set at €150 million per company, which can be increased to €350 million in certain cases.

The table below summarizes the rates and ceilings:

This scheme enables you to finance your tangible investments (such as buildings and equipment) and intangible investments (patent rights, know-how, etc.) in activities linked to the production of the green technologies mentioned.

This includes the essential components and critical raw materials needed to produce this equipment.

Approval: How do I know if I am eligible for C3IV?

It operates on the basis of an application for approval, followed by annual tax returns. The approval, issued by the French Public Finance Department (DGFiP) and reviewed by the French Environment Agency (ADEME), validates the scope and eligible expenditure of the company's investment plan.

Once approval has been obtained, the company must calculate and declare its tax credit each year, in proportion to the expenses actually incurred during the year.

If the company is not subject to corporate income tax, it is possible to request repayment of the claim.

Eligible expenses are defined in tables indicating eligible materials, components and equipment. These tables may be specified by decree.(https://www.impots.gouv.fr/credit-dimpot-au-titre-des-investissements-en-faveur-de-lindustrie-verte-c3iv)

Please note that the service for submitting applications for approval has already been open since September 2023 at the following address: (c3iv@dgfip.finances.gouv.fr). Its entry into force has yet to be specified by decree.

What are the conditions for obtaining this tax credit?

Like the CIR, the C3IV is a French tax incentive that meets a set of strict administrative requirements. To qualify, companies must present a sound, coherent investment plan. Criteria exist for sales, compliance with tax and social security obligations, and relocation of activities.

The calculation must therefore be carried out each year, then declared in the tax return, which may be subject to an audit.‍

Our expertise in tax and financial engineering ensures that your application for approval, tax returns and compliance are properly prepared, maximizing your profit potential with C3IV.

By calling onexpertiseexpertise, be sure to navigate this complex tax system efficiently and make the most of this opportunity and its link with other financing (bank, national calls for projectsADEME, Bpifrance...).

1 - Defined in appendix 1 of decree no. 2022-968 of June 30, 2022

2 - Defined in appendix 2 of decree n°2022-968 of June 30, 2022 Mayotte, Guyane, Saint-Martin, Guadeloupe, Reunion, Martinique)

Lauriane Novac

Project manager in innovation financing. Expert in taxation.

I am passionate about the industrial environment and the associated businesses. I advise and support companies of all sectors and sizes in the strategic and financial development of their innovations. Beyond innovation projects, what motivates me even more in the accomplishment of my missions is the relationship created with my clients and the mutual enrichment.

Need help?

Our innovation experts are here to help you.

What is the CII (Innovation Tax Credit)?

The innovation tax credit is a tax measure reserved for SMEs. They can benefit from a tax credit of 20% of the expenses necessary for the design of prototypes or pilot installations of new products. The declaration is made with the same file and according to the same procedures as the Research Tax Credit (CIR). SMEs can benefit from the early repayment of their CII.

What is the definition of the CIR (Research Tax Credit)?

The research tax credit (CIR) is a tax incentive designed tò encourage companies' R&D efforts. Since January 1, 2008, this system has been considerably strengthened, simplified and de-capped: it now takes into account 30% of companies' R&D expenses, up to €100 million, and 5% above this threshold.

What is an AIP?

The PIA is a Program of Investment of the Future. This program with a national framework allows the financing of projects in line with the State's policies.