Exceptional deduction to support investment extended until April 2017

Good news! The fiscal measure of bonus depreciation (or exceptional deduction to support investment) set up on 15th April 2015 to support investments made by businesses to speed up the modernization of their productive assets, which was supposed to end on 14th April 2016… has been extended until 14th April 2017!

Companies subjected to corporate income tax (IS in French) or personal income tax can benefit from a depreciation from their taxable income equal to 40% of the initial value of the eligible tools/equipment that it purchases or manufactures (excluding financial fees), plus the usual amortization.

All companies, whatever the sector, size or workforce, are concerned. The only condition is that they are subjected to an actual taxation regime.

The deduction must be spread out over the duration of the amortization of the investment on a straight-line basis.

An amendment to the law project for a digital Republic will be filed at the Senate in order to extend this measure until 14th April 2017.

This amendment will also:

  • Bring specifications about the application on installations, equipment, lines and cables of electronic communications in optical fibre,
  • Extend the field of exceptional deduction to certain IT equipment.

The tools or equipment concerned, whether acquired, manufactured, taken in leasing or rented with purchase option, must fall within the following categories:

  • Industrial operations of manufacturing or transformation,
  • Handling,
  • Water treatment and air cleaning facilities,
  • Production of steam, heat or energy,
  • Scientific or technical research,
  • Software when it’s indissociable from eligible material, or when it contributes to industrial operations of manufacturing or transformation,
  • Transport by cable (cable railway, ski lifts…),
  • Installations, equipment, lines and cables in optical fibre,
  • Heavy trucks that are not very pollutant (vehicles of over 3.5 tons running exclusively on natural gas or biomethane fuel).

In the event of goods transferred before the termination of the normal duration of use of goods, the deduction only applies to the company for the amounts already deducted on the date of transfer, calculated prorata temporis.