The Path to Payout: Step by Step
The payout of the R&D tax credit follows a clearly defined process. From the initial application at the BSFZ to the actual credit to your account, you go through four central stages. Here is the overview:
File BSFZ Application (Duration: 4–8 Weeks)
The first step is submitting the application to the Certification Body for R&D Tax Credit (BSFZ). This body examines whether your R&D projects meet the substantive requirements of the FZulG. Processing time is typically 4 to 8 weeks. After a positive assessment, you receive a certificate needed for the next step.
Submit Annex FZ to the Tax Office
With the BSFZ certificate, you submit the Annex FZ (R&D tax credit form) to your responsible tax office (Finanzamt). This can be done together with the regular tax return or separately. In the Annex FZ, you specify the eligible expenditures and the assessment basis (Bemessungsgrundlage). Tip: You can also submit the Annex FZ independently without a pending tax return.
Assessment by the Tax Office (Duration: 4–12 Weeks)
The tax office reviews your application and issues an assessment notice (Festsetzungsbescheid) for the R&D tax credit. Unlike the BSFZ, the tax office does not examine the substantive R&D quality but rather the arithmetic correctness of the eligible expenditures. Processing time varies between 4 and 12 weeks depending on the tax office.
Offset or Refund
After the assessment, the R&D tax credit is offset against your income or corporate tax (Körperschaftsteuer) liability. If the credit exceeds the tax liability, you receive the difference as a direct refund – typically within a few days after the assessment to your bank account on file with the tax office.
Offset vs. Direct Refund
The R&D tax credit is generally offset against the assessed income or corporate tax (Körperschaftsteuer). There are two scenarios particularly relevant for companies:
Typical Timelines in Practice
The actual duration until payout depends on various factors. Here are the typical experience values from our consulting practice:
| Process Step | Typical Duration | Notes |
|---|---|---|
| BSFZ Certificate | 4–8 weeks | With complete application; inquiries may cause delays |
| Tax Office Assessment (current year) | 4–12 weeks | Depends on tax office workload |
| Tax Office Assessment (retroactive) | Up to 6 months | Longer processing time for retroactive applications |
| Total Duration First Application | 3–6 months | From BSFZ application to payout/offset |
Factors Influencing Processing Time
- Complexity of R&D projects: Many or technically demanding projects may lead to inquiries from the BSFZ
- Tax office inquiries: Incomplete applications or unusual expenditures trigger follow-up questions
- Tax office workload: Seasonal peaks (e.g., after filing deadlines) can extend processing time
- Simultaneous tax return: If the Annex FZ is submitted together with the tax return, processing time depends on the entire assessment
- First application vs. follow-up: The first application at the tax office may take longer as the case worker needs to familiarize themselves
What to Do in Case of Delays?
In rare cases, delays may occur in processing by the tax office. Here are your options for action:
Phone Inquiry
The simplest first step: Call the responsible case worker at your tax office and inquire about the processing status. Often a friendly inquiry is enough to accelerate the process. Note down the name of the case worker and the date of the conversation.
Inactivity Appeal After 6 Months
If the tax office has not decided on your application within 6 months without sufficient reason, you are entitled to file an inactivity appeal (Untätigkeitseinspruch) under Section 347 AO. This is a formal legal remedy that compels the tax office to process your application. The appeal must be filed in writing with the responsible tax office.
Further Options for Persistent Delays
- Supervisory complaint: In case of repeated inactivity, a complaint can be filed with the office management
- Tax court: As a last resort, an inactivity lawsuit before the tax court is possible (Section 46 FGO)
- Advance payment adjustment: Alternatively, you can request an adjustment of tax advance payments to achieve at least indirect relief
Special Features of the Payout
The R&D tax credit has some tax-specific features relevant for financial planning:
No Business Income for Trade Tax
The R&D tax credit is not business income under the Trade Tax Act (Gewerbesteuergesetz). This means: The credit increases neither the trade income nor the trade tax. It flows tax-neutrally into your company.
No VAT
The R&D tax credit is not subject to VAT. The payment does not constitute consideration for a service and is therefore not subject to value-added tax. Learn more about the correct accounting of the R&D tax credit in our accounting guide.
No Impact on Loss Carryforwards
The assessment of the R&D tax credit has no impact on existing loss carryforwards (Verlustvorträge). Your losses from prior years remain fully intact and can continue to be offset against future profits. The R&D tax credit is treated separately.
Offset with Advance Payments
The R&D tax credit can also be offset against ongoing advance tax payments. After the credit is assessed, you can request a reduction of advance payments from the tax office. This improves your liquidity during the year – particularly valuable for growing companies.
FAQ: R&D Tax Credit Payout
Typically 3 to 6 months pass from the BSFZ application to the actual payout or offset by the tax office. The BSFZ certificate takes 4–8 weeks, the assessment by the tax office another 4–12 weeks. For retroactive applications, the total duration can be up to 6 months. Professional application preparation can significantly shorten the processing time.
Yes, the R&D tax credit is paid out directly even in the case of losses. If your tax liability is zero or the R&D tax credit exceeds it, you receive the full amount or the difference as a direct payout to your account. This makes the R&D tax credit particularly attractive for startups and growth companies that do not yet generate profits.
Yes, the R&D tax credit can be offset against advance tax payments. After the R&D tax credit is assessed, you can request an adjustment of advance payments from the tax office, so the relief is already noticeable during the year. This is a significant liquidity advantage, especially for companies with high ongoing tax advance payments.
If the tax office has not decided on your application within 6 months without sufficient reason, you can file an inactivity appeal (Untätigkeitseinspruch) under Section 347 AO. A phone inquiry with the responsible case worker is recommended first. NOVARIS supports you in communication with the tax office and handles all correspondence if needed, so you can focus on your core business.
The R&D tax credit is transferred to the business account on file with the tax office (Finanzamt) of the applying company – the same account used for tax refunds. A different bank account must be registered before the assessment via the ELSTER portal or with the official form "Bankverbindung zur Erstattung von Steuern". For a GmbH or UG, the credit is paid exclusively to the company account, never to shareholders or managing directors privately.
The assessment of the R&D tax credit is issued subject to subsequent review (§164 AO). During a tax audit (Betriebsprüfung), the tax office may review the claimed expenditures, time records and the contract research quota (70 %). If expenditures are disallowed, the over-paid credit must be repaid with interest (6 % p.a. under §233a AO, possibly reduced). However, the BSFZ certificate itself is binding – the substantive R&D quality is not re-examined during the tax audit. Clean time records and complete project documentation are therefore essential.
Yes, the payout claim of the R&D tax credit is generally garnishable and assignable – it is treated as an assignable tax refund claim under §46 AO. An assignment must be reported to the tax office in writing on the official form and only takes effect after assessment. Pre-financing through banks based on the expected credit is possible but uncommon – most companies wait for the actual payout. In the event of insolvency, the credit falls into the insolvency estate if the claim was established before the opening of proceedings (i.e. expenditures incurred before the insolvency filing).