Forschungszulage

The Forschungszulage (German research allowance) supports companies with up to 35% of their expenditure on research and development projects. This government incentive is available to all companies liable to tax in Germany.

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Facts up front

Budget

€5.4 billion

Deadline

Ongoing

Location

National

The Forschungszulage – key facts at a glance

The Forschungszulage (German research allowance) supports companies with up to 35% of their expenditure on research and development projects. This government incentive is available to all companies liable to tax in Germany.

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Target audience

All companies liable to tax in Germany
Start-ups and sole traders
Small, medium-sized and large companies
Freelancers and commercial businesses
Research institutions as contractors

Requirements

Carrying out eligible research and development projects
Meeting the Frascati criteria (novelty, uncertainty, systematic approach)
Certification by the BSFZ (certification body for the research allowance)
Tax liability in Germany
Project documentation and evidence of R&D activities

Eligible costs

Personnel costs for R&D projects (gross wages)
Own work by entrepreneurs (€70/hour, max. 40h/week)
Contract research with external providers (70% of costs)
Depreciation of movable assets (since March 2024)
Overheads and other operating costs (since 2026)

Details on the Forschungszulage

The Forschungszulage is a tax-based incentive introduced by the German federal government to strengthen research and development in companies. Launched in 2020, it is designed as a direct subsidy that is granted regardless of the company’s profit situation.

Unlike other funding programmes, companies do not have to wait for an approval decision. As soon as the certification body recognises the project as eligible, there is a legal entitlement to the allowance. This legal certainty makes the Forschungszulage a particularly attractive instrument of innovation funding.

A special feature of the Forschungszulage is retroactive application – companies can claim funding for R&D projects carried out up to four years in the past. This flexibility also allows companies that have never applied for funding before to benefit from their innovation activities.

The Forschungszulage stands out for its broad accessibility. In principle, every company liable to tax in Germany can apply, regardless of legal form, size or sector. This comprehensive eligibility makes the programme one of Germany’s most inclusive funding instruments.

Notably, start-ups without prior revenue are also eligible. Many young companies are excluded from classic funding programmes, yet the Forschungszulage offers them a valuable source of financing for their innovation projects.

Eligible applicants are:

Corporations (GmbH, AG, UG)
Partnerships (KG, OHG, GbR)
Sole traders and freelancers
Associations and foundations with R&D activities
Farmers and foresters with innovation projects

The Forschungszulage exclusively funds research and development projects that meet the internationally recognised Frascati criteria. These criteria ensure that only genuine innovation projects are funded and create a clear distinction from regular business activities.

Eligible R&D categories include basic research, industrial research and experimental development. It does not matter whether the project has already been completed, is still running or is only being planned – the Forschungszulage can be claimed for all project phases.

Eligible project types include:

Product development of new or improved goods
Process development for optimised production
Software development with an innovative character
Materials research and optimisation
Digitalisation projects with an R&D component

The funding takes the form of a direct tax refund whose amount depends on company size. Thanks to the Growth Opportunities Act of 2024, small and medium-sized enterprises in particular benefit from improved conditions.

Small and medium-sized enterprises (SMEs) receive 35 per cent of eligible personnel costs and 24.5 per cent for contract research.

Large companies are funded at 25 per cent of personnel costs and 17.5 per cent for external research.

The maximum assessment basis is:

12 million euros for expenditure from 1 January 2026
10 million euros for expenditure from 28 March 2024
4 million euros for expenditure between July 2020 and March 2024
2 million euros for expenditure between January and June 2020

This results in a maximum annual allowance of 4.2 million euros for SMEs and 3 million euros for large companies.

A funding consultant is an expert who guides companies through the complex process of applying for public funding and helps secure the optimal financial support for their projects. At Ignite Group, we understand the challenges of the funding landscape and offer comprehensive consulting services.

Our services as funding consultants include:

Analysis and identification: We analyse your company and your project to pinpoint suitable funding options – individually, project-related and with a view to maximum grants.
Strategy development: We develop tailored funding strategies precisely aligned with your company’s needs and goals, and examine ways to combine different funding programmes.
Application and documentation: We handle the complete preparation of the application and ensure all documents are submitted fully and correctly, which significantly increases the chances of approval.
Communication with funding bodies: We take over communication with the responsible authorities and funding bodies and represent your interests.
Project support and follow-up: We accompany you throughout the entire project term, help you comply with funding conditions and support disbursement and proof-of-use reporting.

The advantages of our funding consulting:

Time savings: You can concentrate on your core business while we handle the time-consuming funding application process.
Access to hidden funding options: We also know lesser-known programmes and combination options.
Higher success rate: Our expertise significantly increases the chances of your applications being approved.
Maximising the funding amount: We help you obtain the highest possible funding for your project.
Legal certainty: We ensure all legal requirements are met and minimise the risk of repayment claims.

What does a funding advisor do?

A funding advisor is an expert who guides companies through the complex process of applying for public funding and secures the best funding for their projects – from selecting the right programmes through the application to the final report.

At Ignite we work success-driven: we only make you an offer when we are convinced your project is eligible. You are supported comprehensively throughout the process while you concentrate on your core business – we take on the time-consuming part.

Our services as funding advisors