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Tax incentive for research funding in Germany


On January 1, 2020, Germany introduced tax incentives for research funding. This means that research companies have another attractive funding instrument available that supports the existing extensive project funding.

We have all the facts about it and would like to keep you up to date with our  newsletter.

Who benefits?


           
 
  Companies of all sizes  
  with tax liability in Germany
         
 
Research collaborations and
  contract research

What is funded?


The tax incentive can be applied for R&D projects that started after the FZul Act came into force (from January 1, 2020) and can be assigned to at least one of the following categories:

  • Basic research

  • Industrial research

  • Experimental development

How much and how is funded?


The following costs are eligible:


  • internal personnel costs,

  • Cost of cooperating entrepreneurs

  • Awarded research contracts, insofar as they are carried out in the eligible states.

However, the expenses considered must not be already subsidized by other state funding instruments.

Every year, companies can apply for up to € 2 million in costs, which are funded by a rate of 25%. Regardless of the respective profit situation, the tax incentive can be claimed by all entitled companies for up to € 500,000 per year.

Important: This annual maximum amount applies to all companies affiliated within the meaning of the German Stock Corporation Act.

As part of the Corona economic support, the maximum amount is temporarily doubled, so that companies can receive up to € 1 million in research grants annually between 2020 and 2025. *

Process


The tax incentive is a retrospective grant for costs already spent and is claimed with the tax return for the relevant financial year. There are two stages to go through:

  • R&D certificate: The R&D certificate is granted by an external assessment body. In addition to a meaningful project description, the time, personnel and financial framework must also be presented. Since an assessment can also be negative, this is the most important hurdle.

  • Tax incentive application: The tax incentive application is submitted to the relevant tax office together with the R&D certificate.

Tax incentive, research funding or both?


Both funding approaches have their own advantages and disadvantages: In the case of project funding, more cost types can usually be covered, and the funding rates are higher. At the same time, application deadlines and thematic options must be taken into account as well as time delays until the project can start. The tax incentive, on the other hand, does not lead to any delay in the internal R&D schedule and can be used regardless of topics and deadlines.

Our services


m27 has decades of experience with this type of research funding, for example as part of the Austrian research bonus, which works according to the same basic principles. That is why we can support you professionally right from the start, prepare you for the process and achieve the optimum for you.



Contact


Are you interested and want to learn more? Then contact us by phone or send us your contact details.

Dr. Ulrich Albertshauser
Tel.:+43 (1) 533 1090 21
Mobil: +49 (170) 353 30 33
Mail: ulrich.albertshauser@m27.eu

* The legal confirmation is currently pending.