R&D Tax Credit basics
The Forschungszulage (FZulG) is Germany's tax-based R&D incentive. Companies receive 25% of eligible R&D costs as a tax credit — up to €4.2 million per year. It's industry-independent, available to all legal forms, and combinable with other funding programs.
Any company conducting R&D in Germany — whether GmbH, sole proprietor, KG, or AG. Both SMEs and large corporations qualify. Industry doesn't matter: software, engineering, pharma, food — all qualify.
Projects must meet three criteria: Novelty (new knowledge is pursued), Technical Risk (outcome not predictable), and Systematic approach (planned with documentation). Routine development, bug fixes, and pure adaptations don't qualify.
Funding amount & eligible costs
25% of eligible R&D costs, on up to €12M assessment base = max. €4.2 million per year. SMEs receive an increased rate of 35% since 2024.
Personnel costs (gross wages + employer contributions), material costs (since 2024), own contributions of the entrepreneur (flat €100/hr), and contract research (70% applicable).
The R&D tax credit is exempt from trade tax (§ 4(3) FZulG). However, it's subject to income or corporate tax as other operating income. Details on correct accounting in our guide.
Application & process
Two steps: 1) BSFZ application — the certification body reviews your R&D projects. 2) Tax application at the tax office with BSFZ certificate and cost documentation. Full guide: How to apply →
BSFZ certification: 3-6 months. Tax office assessment: another 1-3 months. Total: approx. 4-9 months from application to payout.
You can file an objection or revise and resubmit. A specialized consultant significantly increases success rates.
For the BSFZ: project descriptions, timelines, involved employees. For the tax application: personnel costs, time records, material costs, and the BSFZ certificate. Full checklist: How to apply →
Deadlines & retroactive claims
No — there is no application deadline. Applications can be submitted year-round.
Yes! The R&D tax credit can be claimed up to 4 years retroactively. R&D projects from 2022, 2023, and 2024 are still eligible today.
From 2026, increased limits for SMEs and expanded material cost rules apply. See our FZulG 2026 update for details.
Consulting & costs
Not required, but recommended. Without consulting, ~30% of first-time applications are rejected and 30-40% of eligible costs are overlooked.
Most consultants work on a success-fee basis (percentage of approved credit). NOVARIS Consulting works 100% success-based with a free initial consultation. No risk for you. Book your free consultation →
Look for: FZulG specialization, success rate (100%, 25/25 applications), industry experience, success-based fees, and full service. Details: R&D Tax Credit Consulting →
Payout & accounting
The credit is offset against the next tax assessment. If it exceeds the tax liability, the difference is paid out directly to your account.
As other operating income. All details, accounts, and journal entries in our accounting guide.
It doesn't. The R&D tax credit is exempt from trade tax under § 4(3) FZulG. The reduction is made off-balance-sheet. Details: Corporate tax & FZulG →
Comparison with other funding programs
The Forschungszulage is tax-based, industry-independent, with no deadline. ZIM is a grant, project-specific, with application windows. Both are combinable. Comparison: Funding programs compared →
Yes, the R&D tax credit is combinable with EU programs (Horizon Europe, EIC Accelerator). However, the same R&D costs cannot be funded twice.