Promotion of Research and Development (Research Allowance Act - FZulG)
Tax incentive for research funding for companies subject to taxation in Germany. Applications for certification at the BSFZ can be submitted at any time; application for the research allowance at the tax office up to four years after the expenditure has been incurred.
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Grant criteria
Funding objective
Create incentives to invest in research and development and strengthen Germany as an investment location by providing tax incentives for expenditures on basic research, industrial research, and experimental development.
Eligible expenses
- Personnel costs (internal wages)
- Contract research costs
- Own contributions from sole proprietors
- Material costs
Eligible to apply
- Companies
- Educational Institutions
Funding requirements
- Tax liability in Germany
- Independent execution of R&D projects
- Application for certification prior to determination of the research allowance
Description
The tax research allowance according to the Research Allowance Act (FZulG) offers taxable companies of all sizes and legal forms in Germany an attractive incentive to advance their own research and development projects. With a supported funding rate of 25% (35% for small and medium-sized enterprises), expenses for basic research, industrial research, and experimental development are rewarded in the form of a direct grant. Up to €2.5 million per year (€3.5 million for SMEs) can be claimed, with eligible expenses including personnel and material costs as well as contract research and in-house services by sole proprietors. The goal is to strengthen Germany as a research location and sustainably promote the innovative capacity of all industries.
The two-stage application process begins with the issuance of a certificate by the Research Allowance Certification Office (BSFZ), which can be applied for at any time before or during the R&D project. Subsequently, the allowance is determined by the responsible tax office up to four years after the corresponding expenses have been incurred. The fully digitized application process promises a straightforward procedure without bureaucratic hurdles. Due to the open thematic orientation, all R&D projects are fundamentally eligible to apply – from flagship projects in large companies to innovative pilot projects in start-ups and research institutions.