Forschungszulage and EU Funding: Two Funding Worlds Compared
German companies investing in research and development face a strategic question: Should you rely on the national Forschungszulage (research tax credit), on EU programs like Horizon Europe or the EIC Accelerator — or on both? The answer is almost always: Use both funding sources. But the differences in eligibility, effort, and success rates are enormous.
This comparison helps you develop the right funding strategy for your company — whether you are an SME, mid-sized enterprise, or large corporation.
National & direct
The Forschungszulage is a national legal entitlement — every R&D-active company receives it.
EU-wide & competitive
EU programs like Horizon Europe award funding in competition with applicants from 27+ countries.
Combinable
Both funding sources can be used in parallel — as long as the same costs are not double-funded.
Key Funding Programs at a Glance
Forschungszulage (FZulG)
Germany’s national R&D tax credit. A legal entitlement for every company in Germany with R&D activities. Up to €4.2M per year based on an assessment base of €12M. No competition, no lottery.
Horizon Europe
The EU’s framework program for research & innovation (2021–2027, budget: €95.5B). Requires transnational consortia from at least 3 EU countries. Success rate: approx. 15%. Funding as non-repayable grants.
EIC Accelerator
For highly innovative SMEs and start-ups. Up to €2.5M grant + up to €15M equity. Single applications possible (no consortium required), but extremely competitive. Success rate: approx. 5–8%.
Eurostars / Eureka
For research-intensive SMEs. Bilateral or multilateral projects with at least one international partner. Funding rates set nationally, in Germany through BMBF.
Forschungszulage vs. EU Funding: Head-to-Head Comparison
Eligibility Requirements in Detail
Forschungszulage
- Any company subject to taxation in Germany
- No industry restrictions
- No minimum revenue or employee thresholds
- R&D project must meet three criteria: novelty, technical risk, systematic approach
- BSFZ certification + tax office application
- Owner contributions at €100/hour
- Contract research at 70% eligible
EU Funding (Horizon Europe)
- Consortium of at least 3 partners from 3 EU countries
- Project must fit a thematic call
- High TRL (Technology Readiness Level) often expected
- Extensive proposal in English (50–100+ pages)
- Evaluation by external reviewers
- Success rate: approx. 15% (EIC Accelerator: 5–8%)
- No legal entitlement — purely competition-based
For companies applying for R&D funding for the first time, the Forschungszulage is the fastest and safest entry point. An experienced consultant can handle the entire process — from the BSFZ application to the tax office submission.
Strengths and Weaknesses of Both Funding Paths
Forschungszulage — Advantages
- Legal entitlement — no rejection possible
- Retroactive claims (up to 4 years back)
- No consortium needed — solo application
- Low bureaucracy, German-language process
- Available for loss-making companies (direct payout)
- Open to all industries — no call topics
Forschungszulage — Limitations
- Maximum: €4.2M/year (assessment base €12M)
- Covers only a portion of R&D costs (25–35%)
- Does not fund equipment or capital investments
- Only for companies taxable in Germany
EU Funding — Advantages
- Large funding amounts (sometimes over €10M)
- 100% grant possible (no repayment)
- International network through consortia
- Reputation and visibility as “EU-funded”
- Access to EU infrastructure and datasets
EU Funding — Disadvantages
- Extremely low success rate (~15%, EIC: 5–8%)
- High application effort (months, external consultants)
- Finding consortium partners is complex and time-consuming
- Extensive reporting obligations during the project
- No retroactive applications possible
Combinability: Forschungszulage + EU Funding at the Same Time?
The short answer: Yes — but with one clear restriction. You may not claim the same costs through both the Forschungszulage and an EU program. This would constitute double funding and is explicitly prohibited under § 7 FZulG.
Checklist: How to Correctly Separate Costs
✓ Clearly delineate R&D projects from each other
✓ Maintain time tracking per project and employee
✓ Assign material costs unambiguously to one project
✓ Exclude EU-funded costs from the tax office application
A specialized consultant ensures your funding strategy is compliant and that you don’t leave money on the table. NOVARIS Consulting works on a success-based fee model — no risk for you.
Strategic Recommendation: Who Should Use What?
SME / Start-up
Forschungszulage first. Fast, certain, no consortium needed. Consider the EIC Accelerator as a supplement.
Mid-sized companies
Use both in parallel. Forschungszulage as a reliable baseline, Horizon Europe applications for larger partner projects.
Large corporations
Multi-funding strategy. Forschungszulage for ongoing R&D, EU programs for strategic lighthouse projects.
Timeline: From Idea to Funding
Frequently Asked Questions: Forschungszulage vs. EU Funding
Yes, both funding instruments are fundamentally combinable. The key rule: The same costs must not be double-funded. If you claim personnel costs through Horizon Europe, you cannot also claim those same hours for the Forschungszulage. Solution: Clearly allocate costs to different projects or time periods.
No. The two funding instruments are complementary. The Forschungszulage is your reliable base instrument (legal entitlement, every year). EU programs offer additional potential for larger, international initiatives. Our recommendation: Start with the Forschungszulage and evaluate EU calls in parallel.
For Horizon Europe, the average success rate is approximately 15%. For the EIC Accelerator, it’s only 5–8%. The Forschungszulage, by contrast, has a success rate of virtually 100% — because it is a legal entitlement. Any company meeting the requirements (novelty, technical risk, systematic approach) receives the credit.
No. The Forschungszulage is a purely national instrument. You apply as a single company on your own. No consortium and no international partner is required. Owner contributions (€100/hour) and contract research (70% eligible) can also be included.
Yes, and this is exactly what we recommend. While EU applications take 9–18 months, you can claim the Forschungszulage retroactively for already completed R&D projects. This secures immediate funding regardless of the EU outcome.
NOVARIS Consulting works on a success-based fee model. You only pay when your Forschungszulage is approved — no risk for you. The initial consultation is free. Schedule your free consultation now →