Tax incentives for research


Since the Research Allowance Act (FZulG) came into force in 2020, companies that are liable for tax in Germany and conduct research can receive tax incentives for the costs of research and development projects. It is possible to offset part of the expenditure on research and development against income tax or corporation tax, even retroactively for up to three years. This also applies to companies that are not yet profitable.

What is eligible for funding?

  • Basic research, e.g. experimental work to acquire fundamental knowledge
  • Industrial research, e.g. research to improve products and processes
  • Experimental development, e.g. development of new products/processes based on existing knowledge

What expenses are eligible for funding and how?

In-house research and cooperation projects:

  • Personnel costs for activities in the proposed R&D project
  • Depreciation for purchased or self-manufactured equipment (from 27 March 2024)

Contract research:

  • 60% of the costs for externally commissioned research contracts (until 27 March 2024)
  • 70% of the costs for externally commissioned research contracts (from 27 March 2024)

Funding:

  • 25% of eligible expenses, 35% for SMEs (from 27 March 2024)
  • Expenses up to €4 million (until 27 March 2024) or up to €10 million per year (from 27 March 2024) are eligible for funding.

Who assesses the eligibility of a project?

The Research Allowance Certification Authority (BSFZ) assesses the content of projects according to the following criteria:

  •     Gaining new insights (novelty)
  •     Risk of successful implementation of the project (uncertainty)
  •     Structuring of the project through a work plan (scheduling)

 The BFI supports you in applying for the research allowance

  •     Selection of suitable projects for tax-based research funding
  •     Technical and content-related formulation of the funding application
  •     Alignment of the funding application with the funding priorities
  •     Support with submitting the application via the online portal

Funding applications BFI

The BFI was awarded several times with the BSFZ seal for its successful application for tax incentives for research.