Every Taxable Company is Eligible – Regardless of Legal Form
The Forschungszulage under the Forschungszulagengesetz (FZulG) is available to every company with unlimited tax liability in Germany – regardless of legal form, company size, or industry. This is clearly stipulated in Section 1 FZulG and is applied accordingly by the tax authorities.
In detail, this means: All companies subject to either corporate tax (corporations such as GmbH, UG, AG) or income tax (sole proprietors, partnerships such as KG, GbR, OHG) in Germany are eligible. The Forschungszulage is not a subsidy with a restricted pool of recipients, but a tax entitlement available to every taxable company that conducts qualifying R&D projects.
Although the entitlement is independent of legal form, the practical implementation varies significantly by legal form. The key differences concern three areas: First, who files the application (the company itself or individual partners). Second, whether owner contributions are eligible for funding. Third, how the Forschungszulage is offset against taxes (via the corporate tax or income tax assessment).
These differences can have a considerable impact on the actual amount of Forschungszulage received. Owner-managed companies and partnerships in particular have structuring options that are not available to corporations – and vice versa. It is therefore worthwhile to understand the specifics of your own legal form and optimize the application accordingly.
Which Path Applies to Your Legal Form?
Research Allowance by Legal Form Compared
The following table shows the key differences in the Forschungszulage by legal form at a glance:
| GmbH / UG / AG | Sole Proprietor | GmbH & Co. KG | GbR / OHG | |
|---|---|---|---|---|
| Eligible | Ja (KStG) | Ja (EStG) | Ja (EStG) | Ja (EStG) |
| Funding rate | 25 % / 35 % KMU | 25 % / 35 % KMU | 25 % / 35 % KMU | 25 % / 35 % KMU |
| Personnel costs | Employees | Employees | Employees | Employees |
| Owner contributions | No | Ja (100 €/h) | Partial | Ja (100 €/h) |
| Max. assessment base | 12 Mio. € | 12 Mio. € | 12 Mio. € | 12 Mio. € |
| Applicant | GmbH itself | Owner | KG (partner level) | Individual partners |
| Tax offset | KSt-Bescheid | ESt-Bescheid | ESt-Bescheide | ESt-Bescheide |
Research Allowance for Sole Proprietors
Sole proprietors and freelancers hold a special position under the Forschungszulage, as they benefit from a provision not available to corporations: the eligibility of owner contributions.
The Key Advantage: Owner Contributions Are Eligible
As a sole proprietor, you can include your own R&D working time as an owner contribution in the Forschungszulage assessment base. The law provides for a flat hourly rate of 100 EUR per hour. A maximum of 40 hours per week can be claimed. With year-round R&D activity, this results in an additional assessment base of up to 208,000 EUR per year (100 € x 40 h x 52 weeks).
At a funding rate of 25% (or 35% for SMEs), this means the Forschungszulage from owner contributions alone can reach up to 52,000 EUR (or 72,800 EUR for SMEs) – in addition to personnel costs of employed staff. This owner contribution flat rate is particularly attractive for owner-managed businesses where the owner is the central R&D driver.
Additionally: Personnel Costs of Employed Staff
In addition to owner contributions, the personnel costs of employed R&D staff are of course also eligible – under the same conditions as for corporations. The owner's contributions are added as an additional assessment base, increasing the total funding.
Documentation Requirements
For the recognition of owner contributions, project-related time tracking is essential. Document your daily R&D working time in relation to the certified research projects. Time tracking must be done promptly (ideally daily or weekly) and be plausible. Ensure that the documented hours are consistent with the actual project progress.
Tax Offset
For sole proprietors, the Forschungszulage is offset via the owner's personal income tax assessment. The allowance is credited against the assessed income tax. The same applies here: if the Forschungszulage exceeds the tax liability, the difference is paid out. This makes the Forschungszulage attractive for sole proprietors in their founding phase or with low profits as well.
Special Cases and Common Pitfalls
Beyond the common legal forms, there are numerous special cases that require particular attention. Click a topic for details:
The increased SME funding rate of 35% instead of 25% makes a significant difference in funding amount. However, SME status is assessed at the group level: partner companies and affiliated companies are counted proportionally or fully in the calculation of employee numbers and turnover. A company with 50 employees can thus lose its SME status if it is part of a larger corporate group. Carefully review your ownership structure against the EU SME definition.
In a fiscal unity (Organschaft), only the parent company (Organträger) applies for the Forschungszulage. The R&D expenditures of the subsidiaries are attributed to the parent. This can have both advantages and disadvantages: on one hand, expenditures are consolidated; on the other, all subsidiaries share the maximum assessment base of 12 million EUR. Dissolving the fiscal unity may be tax-advantageous in some cases – but this should be carefully weighed against other tax implications.
Foreign companies that maintain a permanent establishment in Germany can also apply for the Forschungszulage – provided the permanent establishment is subject to tax in Germany. However, only R&D expenditures attributable to the German permanent establishment are eligible. Personnel costs for employees working abroad are not eligible, even if they work on a German project. The allocation follows the general profit attribution rules for permanent establishments.
Non-profit organizations such as associations, foundations, or charitable GmbHs (gGmbH) can only apply for the Forschungszulage for their taxable commercial operations. R&D expenditures in the non-profit sector or in purpose-driven operations are not eligible. In practice, drawing this distinction is often difficult and requires careful tax classification.
Good news for founders: the Forschungszulage is available to your company from the very first fiscal year – regardless of whether revenue has already been generated. Since the Forschungszulage is paid out even in loss situations (it is a tax credit, not a tax reduction), it is particularly valuable for startups in the development phase. You receive the Forschungszulage as a direct payout from the Finanzamt, improving your cash flow during the most critical phase of your company.
If your company changes its legal form (e.g., from sole proprietor to GmbH), pending BSFZ applications and Forschungszulage claims must be transferred to the legal successor. Notify both the BSFZ and the Finanzamt of the change. The assessment base is typically split proportionally by time between the old and new legal forms. Note: owner contributions that were eligible as a sole proprietor can no longer be claimed after converting to a GmbH.
Further Resources
Deepen your knowledge of the research allowance with our specialized resources:
Sources & legal references
All statements regarding eligible base, funding rates, and application process are based exclusively on the following official legal sources and authority documents. Research date: .
- § 4 (3) FZulG (R&D Tax Credit Act)
- § 9 No. 7c GewStG (Trade tax exemption)
- § 169 AO (Assessment period)
- BMF letter on FZulG application 2024-11-11
- BSFZ certification body
- Wachstumschancengesetz (BGBl. I 2024 No. 108)
Note: This page does not replace individual tax advice. For a binding assessment of your project, please contact us or your tax advisor.