Interdisciplinary funding advice for research and development

In addition to technical planning, research and development projects also require financial planning, in which funding programs are often important components. One of these components are the tax incentives for R&D.  

With the tax incentives for R&D, companies can receive annual funding of up to EUR 2,500,000 for their research and development projects. For small and medium-sized enterprises, the maximum amount of the tax incentives for R&D increases to EUR 3,500,000. 

Unlike other subsidies, an application for tax incentives for R&D is not only possible for future research and development projects, but also for ongoing and completed projects. 

The application process and documentation requirements are significantly lower than for funding within the framework of traditional project funding, so that the administrative effort is not only proportionate to the tax incentives for R&D for large projects. 
 

Tax incentives for R&D - our funding advice 

Although the tax incentives for R&D are determined by the tax office, technical know-how is required in addition to tax expertise. 

Tax structuring and the application to determine the tax incentives for R&D requires tax expertise. However, this application is only the second step in the research grant application process. In the first step, it is not tax specialists from the tax authorities who check whether a project is eligible for funding, but engineers or scientists from the certification body. Communication at eye level is essential for both applications.

Funding advice at the highest level 

Our team for your funding advice therefore consists not only of tax specialists, but also of experts in the fields of natural sciences and technology with our colleagues at BDO Technik- und Umweltconsulting GmbH.

In addition, the Research Allowance Act (Forschungszulagengesetz, FZulG) refers to the General Block Exemption Regulation of the European Union, so questions of state aid law may arise. If required, we will be happy to add colleagues from our cooperation partner BDO Legal Rechtsanwaltsgesellschaft mbH to the team responsible for advising you on subsidies. In addition to a state aid law review, they can also draw up or review contracts for projects that are carried out as part of contract research or cooperation.

At your request, we will also be happy to provide you with funding advice that goes beyond the tax incentives for R&D in order to check whether alternative funding opportunities are available for your project at national or European level. 
 

Tax incentives for R&D - funding advice in an international context

Not only in Germany, but also in many other countries, research and development projects receive tax incentives. While the definition of research and development is similar in many countries, the way in which companies can take advantage of these benefits differs considerably in some cases.

The interactive world map from BDO Global provides an initial overview of existing funding opportunities. 

Country-specific funding advice from a single source 

Our global approach to funding advice not only includes country-specific funding advice, but aims to optimize the return on investment for companies whose research and development activities span more than one country. In addition to funding your research and development projects, we always keep an eye on your tax situation, as appropriate structuring can have an impact on other areas such as transfer pricing and withholding taxes. Together with the funding consultants of the BDO member firms in the countries relevant to you, we will be happy to provide you with a customized offer for individual funding advice. 
 

Research grant - your next steps 

Have we aroused your interest? 

We would be happy to provide you with an initial overview of the research grant, either via the following explanations or as part of a telephone call or video conference, in which we can also explain our interdisciplinary approach to funding advice in more detail. 

Feel free to contact us without obligation! 
 

Overview of the tax incentives for R&D 

The Research Allowance Act (Forschungszulagengesetz, FZulG) provides companies operating in Germany with funding for their research and development projects. Compared to traditional project funding, this is characterized by a much simpler application process and fewer documentation requirements and can be applied for planned, ongoing and completed projects. 

In principle, all companies operating in Germany that carry out basic research, industrial research or experimental development and meet the criteria of the General Block Exemption Regulation under state aid law are eligible to apply. Both in-house research and development, cooperations and projects that are awarded externally as part of contract research in the European Economic Area are eligible for funding. 

In addition to the gross wages of the employees entrusted with the research, including the employer's social security contributions, the depreciation of the movable assets required for the research as well as 70% of the remuneration for the contract research are eligible and are included in the assessment basis for the tax incentives for R&D, which is limited to EUR 10,000,000 per year. 

The tax incentives for R&D itself amounts to 25% of the assessment basis. For small and medium-sized enterprises, the funding rate is increased by 10 percentage points and thus amounts to 35% for these companies. The annual tax incentives for R&D thus amounts to a maximum of EUR 2,500,000 or EUR 3,500,000 for small and medium-sized enterprises. 

The tax incentives for R&D are paid out by the tax office and require an annual application. The assessment of the tax incentives for R&D can also be applied for retroactively for several years within the assessment periods, whereby the conditions and framework conditions may differ due to changes in the law. The basis for the tax incentives for R&D application to the tax office is a certificate of eligibility for funding for the respective project, which must be applied for at the certification body. This is also referred to as a two-stage application procedure. 

The tax incentives for R&D are initially offset in full against the assessed income tax or corporation tax and lead to a corresponding reduction in the subsequent payment or a refund of income tax already paid. If the tax incentives for R&D exceed the assessed tax, surpluses are not carried forward but paid out directly. This means that companies benefit directly even if the tax incentives for R&D exceed the current tax burden, for example during periods of losses. 

Further details on the tax incentives for R&D can be found in our Insights. 

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