What is funded?
The tax incentive can be applied for R&D projects that were started after the FZul Act came into force on January 1, 2020 and can be assigned to at least one of the following categories:
- Basic research
- Industrial research
- Experimental development
No matter in which field you develop the innovation or whether you work alone, in cooperation with third parties or even place a research order – all constellations are possible.
How much and how is funded?
The sum of eligible costs is referred to as the assessment base under the tax incentive and is subsidized at a fixed rate of 25%. The following can be applied:
- Internal personnel costs
- Cost of cooperating entrepreneurs
- Awarded research contracts, insofar as they are carried out in the eligible states.
However, the expenses considered must not be already subsidized by other state funding instruments.
Every year, companies can apply for up to € 4 million in costs, which are funded by a rate of 25%. Regardless of the respective profit situation, the tax incentive can be claimed by all entitled companies.
For the period from July 2020 to July 2026, the maximum possible assessment basis is € 4 million
and thus the maximum possible tax incentive is € 1 million per year!
In principle, the tax incentive is first offset as a reduction in tax liability, after which excess amounts are paid out and remain tax-free according to current information. This means that the tax incentive can be claimed by all eligible companies regardless of their respective profit situation.
Important: The maximum annual amount of the tax incentive applies jointly to all affiliated companies within the meaning of the German Stock Corporation Act. The expenses taken into account must not already have been subsidized via other government funding.
Process and Timeline
The tax incentive is a retrospective grant for costs already spent and is claimed with the tax return for the relevant financial year. There are two stages to go through:
Tax incentive, research funding or both?
Both funding approaches – the research allowance and program-driven research funding – have their own advantages and disadvantages: In the case of project funding, more cost types can usually be covered and the funding rates are higher. At the same time, however, application deadlines and thematic options must be taken into account, as well as time delays until the project is allowed to start. The tax incentive, on the other hand, does not lead to any delays in the internal R&D schedule and can be claimed regardless of call topics and deadlines, but does not fund all cost types.
m27 has decades of experience with research funding via tax incentives, for example within the framework of the Austrian research bonus, which functions according to the same basic principles. That is why we can already draw on more than 10 years of experience with this set of instruments and professionally accompany you through the entire process from the very beginning.