1. What is the tax environment for patents?

France is a leader in innovation and one of Europe's top patent filers, thanks in particular to its attractive patent tax system.

This preferential regime for patents is part of a general tax environment often criticized for its high tax rates applicable to both individuals and corporate entities.

As a reminder, companies are subject to corporation tax (impôt sur les sociétés - IS) on their French-source profits, at the standard rate of 33.1/3%, while SMEs benefit from a reduced rate of 15% on the portion of their profits not exceeding €38,120.

Individuals are taxed on their income according to a progressive scale, with an upper marginal rate of 45% for 2016 income.

However, the French tax system includes a number of measures that reduce the corporate income tax base or give entitlement to...