What is funded and how? Who can benefit?
The Research and Development Tax Allowance (FZul) has been a nationwide funding instrument since January 1, 2020. R&D projects in the categories of basic research, industrial research or experimental development are eligible. Companies of all sizes and from all sectors can benefit.

With the economic stimulus package to overcome the Corona crisis, the maximum amount of subsidized expenses was doubled to 4 million euros for a limited period until mid-2026, so that a tax advantage of up to 1 million euros per year can be realized at a subsidy rate of 25 percent. The amount of the research allowance depends on the eligible personnel expenses for the specific project. Contract research, e.g. at universities and research institutions, has now also been included. When research contracts are awarded, 15 percent of the contract value is funded.

By offsetting the research allowance against the tax liability, it can also be paid out as a tax refund (tax credit). This also makes the funding attractive for companies that are in a loss-making phase and therefore pay little or no taxes, and for start-ups in the initial phase.

NEW since 28.03.2024
The amendments to the Research Allowances Act (FZulG) came into force on March 28, 2024, whereby the individual substantive provisions themselves contain application dates that must be observed in some cases.

The Research Allowances Act was amended as follows:

> Increase in the maximum assessment basis to EUR 10 million

> Extension of funding to material costs or depreciable movable fixed assets

> Increase in the proportion of eligible costs for contract research from 60 % to 70 %

> Increase in the flat hourly rate for sole traders from EUR 40 to EUR 70

> On request: Increase in the research allowance by 10 percentage points from 25 % to 35 % for small and medium- sized enterprises

> Earlier payment of the research allowance through integration into the tax prepayment procedure

Who benefits and how:

Start-ups
The research allowance can be paid out as a tax credit if a refund claim exists. It does not matter if the company has not yet generated any turnover. An application is also possible in the event of a loss.

Small and medium-sized businesses
As the client is the beneficiary in the case of contract research, this particularly benefits SMEs that cannot maintain their own research and development department. The research allow ance can be applied for before and during the project or even afterwards.

Large companies
Up to now, there has been virtually no funding available for open-technology development projects that need to be implemented quickly. The research tax allowance now closes this gap, as it can be applied for regardless of the size of the company.

Fall-back alternative to project funding
Companies that are not successful in the competitive process for project funding can claim tax incentives for research. The DITF External Funding Department will be happy to provide further information.