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  • Stéphanie

The Many Faces of Research and Development

A Research and Development (R&D) activity must be carried out according to the scientific method: make an observation, define a hypothesis, develop theories and/or models, build an experimental protocol and carry it out, analyze the results and draw the conclusions.


Research eligible for the Tax Credit for Research (CIR) must meet the criteria defined in the Frascati Manual. This report, published by the OECD (The Organization for Economic Cooperation and Development) at the end of a conference held in 1963 in Frascati, Italy, is a reference for the CIR.

According to this manual, research is classified into 3 categories: basic research, which analyzes properties and structures in the aim of formulating hypothesis, theories or laws without considering a potential application; applied research, undertaken to determine the possible uses of basic research results; experimental development which consists in systematic work leading to new products and processes, or improvement of existing ones.


Research and Development Criteria CIR

According to the Frascati Manual, in order to qualify as Research and Development operation, an activity must meet the 5 following criteria:

  1. Include an element of novelty in the sense that it will lead to the acquisition of new knowledge.

  2. Include an element of creativity in applying new concepts or ideas to improve the state of the art.

  3. Include an element of uncertainty, i.e., the probability of resolving the encountered difficulty or demonstrate that the way to achieve the aimed objective cannot be known in advance thanks to the state of the art.

  4. Be systematic: the activity must be carried out in a structured way, i.e., planned and with procedure and the results must recorded.

  5. Be transferable and/or reproducible: the activity must lead to the possibility of transferring the acquired knowledge (this includes negative results). It must also guarantee that other researchers are able to reproduce the results obtained. The goal of Research and Development (R&D) being the acquisition of new knowledge, the results should not remain tacit but should be recorded (at least internally).

Research and Development plays a crucial role in driving progress and innovation in various industries. From developing new products and technologies to improving existing ones, R&D activities are constantly pushing the boundaries of what is possible. In this post, we highlighted the different types of Research and Development operations and their eligibility for the Tax Credit for Research (CIR).


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