03 Nov 2025
Meritocracy in the company: How performance culture determines advancement and compensation
The article on ingenieur.de explores how innoscripta SE systematically implements a performance-based culture: Promotions and compensation are determined not by tenure or connections, but exclusively by measurable results and clearly defined target levels. Transparent career paths and regular feedback ensure fairness and acceptance.
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14 Oct 2026
AI development in Germany: Funding opportunities under the Forschungszulage programme
The fastest-growing technology, Artificial Intelligence, is no longer the domain limited to the giants in the field like Google or OpenAI. It is changing and transforming every industry, every process. The innovations and digital transformation in the field of AI can presently be seen in industries as complex as healthcare, logistics, and manufacturing. As an economy, Germany ensures that innovation in AI and developments in its related fields, including Machine Learning, Natural Language Processing (NLP), and Robotics, are not limited to global companies, but also regional companies of different sizes get the opportunity to drive transformation. Under the Research Allowance programme, the government provides an impressive tax incentive to support and accelerate R&D for all companies with a qualified research project, irrespective of their sizes or industries.The strategic focus of AI R&D in GermanyWorld-class research structuresAiming at a strong research ecosystem and long-term excellence, Germany is actively investing in the expansion of AI centres of excellence among top universities such as Berlin, Munich, and Tübingen. The objective of strengthening research infrastructure is to make these centres the technological hubs promoting innovation, knowledge sharing, and collaboration. In addition to these centres in universities, the government is also connecting critical data networks like GAIA-X and Mobility Data Space to build a new and credible bridge that businesses and industries driving Industry 4.0 can employ to access and share data.Interdisciplinary and applied researchAI is considered an enabling technology across various domains and research in AI is not limited to core AI verticals, but also focuses on real-life challenges in fields such as healthcare, mobility, climate protection, agriculture, and aerospace. To support this process, the government funds AI flagship projects that focus on environmental sustainability, circular economy solutions, and Industry 4.0 applications.Sustainable and trustworthy AIResponsible AI is an important part of AI development and Germany is positioning itself as a pioneer in it. The research projects give a high level of importance to energy-efficient AI systems and to lessening the impact of AI technologies on the environment. Equal attention is also given to AI development that is transparent, accountable, and ethical.European and global research cooperationGermany is actively focusing on the development of a Europe-wide AI network under the brand “AI made in Europe”. In order to achieve this, it will share expertise, expand and connect Europe's top AI research centres, provide funding support, and ensure strong ethical standards in AI development. The established strategic partnerships with Canada, France, and Japan focus on cooperation, specifically, the Franco-German network that other countries can join in the area of AI research and innovation.Forschungszulage and eligibility of AI R&D projectsThe Research Allowance (Forschungszulage) is the tax incentive programme that provides monetary support to eligible R&D projects in terms of tax credits or cash refunds. The key features of this programme are:It is open to all companies across industries that are undertaking an R&D projectIt is size agnostic and available to companies such as start-ups, SMEs, large corporations if they have an eligible R&D initiativeIt is given as tax relief or cash refunds if the company has no tax liabilityThe monetary support is given to companies based on the expenses incurred for the R&D project.How do you determine if an AI project is eligible for Research Allowance? The answer depends on factors such as technological complexities and uncertainty in outcomes of the particular AI research project.Technological Uncertainty: The project results need to exhibit an element of uncertainty, where the outcome should neither be predictable nor readily available, unlike routine activities.Systematic approach: The AI research project must follow a structured plan with clearly defined objectives and steps for achieving them.Complex architecture: Projects involving the development of new AI architectures, such as neural networks that differ from existing models, may qualify for the Research Allowance if they address technological uncertainties and meet the applicable R&D eligibility criteria.State-of-the-art novelty: The AI application or solution must aim to overcome a technical knowledge gap or create an objective advancement in the state of the art, rather than simply implementing existing solutions in an industry or company where they were not previously present.In-house or contract project: The research project conducted by in-house developers or outsourced to external partners within the European Economic Area is eligible as long as they meet the criteria and have innovative elements in their work packages, not only routine activities. For qualifying contract R&D awarded within the EU/EEA after 27 March 2024, 70% of the contractor fees can be included in the eligible expenditure base.Examples of AI projectsExamples of AI projects that may qualify for funding, provided they meet the applicable R&D eligibility criteria, include:Natural Language Processing (NLP) in the process of legal documentationComputer vision used for quality control in the field of manufacturingPredictive maintenance systems using Machine LearningFraud detection systems in FinTech using AIAI-based data classification in traffic management systemsHow to apply?Applying for Forschungszulage involves two steps:Application for the BSFZ certificate: The BSFZ office examines the project details to determine whether it falls under the R&D project category. Upon the project meeting all requirements, the BSFZ issues a certificate that states the project is eligible to pursue the Research Allowance.Application seeking financial support: In the second stage, after obtaining the BSFZ certificate, the application is submitted to the tax office to claim the financial support.Explore: Research allowance 2026 - the most important changes at a glanceConclusionGermany's commitment to advancing AI capabilities is evident in their investments in research infrastructure, ethical standards, and international partnerships. For companies developing AI solutions, whether start-ups, SMEs, or established industry players, the Forschungszulage offers a practical way to reduce financial burden and accelerate innovation. By supporting projects that tackle technological uncertainty and create genuine advancement, the programme ensures that AI-driven transformation is not limited to global tech leaders but is actively cultivated within Germany’s economy.
05 Oct 2026
Eligibility of cloud expenses in US R&D tax claims
Cloud computing has become important to R&D, specifically for technology companies using platforms such as AWS, Microsoft Azure, and Google Cloud Platform (GCP) for development, testing, experimentation, and data processing. For U.S. tax credit claims, however, cloud expenses are not automatically categorized as Qualified Research Expenses (QREs). Eligibility depends on the nature of the cloud arrangement, how the resources are used, and whether the expenditure can be directly linked to qualified research activities.By contrast, in jurisdictions such as the Netherlands, Germany, and Sweden, R&D incentives are structured almost exclusively around internal labor and payroll costs, meaning that operational cloud expenditures cannot be claimed as standalone eligible expenses, unlike the conditional structure found in the United States.How can cloud expenses qualify?Treasury Regulation §1.41-2(b)(4) allows amounts paid to another person for the right to use computers in conducting qualified research to be treated as QREs. Although historically associated with computer time-sharing arrangements, public cloud infrastructure can operate on a comparable basis by providing access to computing resources owned and operated by third-party providers.For computer usage costs to qualify, the following conditions apply:The computer is owned and operated by someone other than the taxpayer.The computer is located off the taxpayer's premises.The taxpayer is not the primary user of the computer.The shared and multi-tenant infrastructure of public cloud platforms can generally align with these requirements. The corporate headquarters or country of incorporation of a cloud service provider does not determine eligibility for the U.S. R&D tax credit. Instead, under Treasury Regulation §1.41-2(b)(4) and the exclusion for research conducted outside the United States under IRC §41(d)(4)(F), the physical location of the data centers executing the workload is relevant. Where development, staging and testing environments run on servers physically located within the United States or its possessions, the associated hosting fees may qualify as eligible computer rental expenses, regardless of whether the cloud service provider is a foreign or domestic entity.Which cloud expenses can be eligible?Eligibility depends mainly on what the cloud resource is being used for, rather than on what type of service the company purchased.Infrastructure as a Service (IaaS): Expenses incurred on virtual servers, storage, networking, and similar resources directly used for research and development, testing, computational experiments, or data analysis associated with qualified research projects. Platform as a Service (PaaS): Managed development environments can qualify when used to build, debug, test, or deploy new applications and features as part of qualified R&D.Software as a Service (SaaS): Ready-to-use applications such as payroll, CRM, accounting, productivity, and general collaboration tools are typically excluded from eligible costs when they are used to support routine administrative or operational activities rather than qualified R&D purposes. A critical distinction is that expenses associated with hosting software under development, testing new functionality, or performing technical experiments may qualify only if they are part of a qualified research initiative. But expenses related to hosting a finalized product for customers, general file storage, administrative backups, mail hosting, and other routine business activities are ineligible. In instances where both types of activities appear on the same cloud invoice, the qualifying R&D portion must therefore be separated from production and administrative costs.Allocating and substantiating cloud expensesWhile placing the R&D tax credit claim with cloud expenses, a supportable allocation methodology is needed to identify the portion of the costs attributable to qualified research. Useful supporting evidence includes:Resource tagging that differentiates R&D, development, and experimentation resources from production and administrative resources.Usage logs and metrics showing compute hours, instance usage, data consumption, and other resource activity.Cloud provider invoices supporting the total costs.Cost-centre and accounting records connecting expenses with specific R&D projects.Technical design and test documentation linking cloud usage to qualified research activities.Businesses claiming cloud computing expenses as QREs must also consider comparable computer rental or time-sharing expenses in the relevant historical base-period calculations. Under the Regular Method, this can affect the historical QRE base used in determining the fixed-base percentage. Under the Alternative Simplified Method, comparable expenses should be consistently reflected in the applicable three-year historical QRE period. This consistency is important when introducing cloud computing expenses into an R&D tax credit calculation.ConclusionFor cloud expenses associated with U.S. R&D activities, accurate expense tracking and documentation are essential. Companies are required to distinguish resources used for development and experimentation from those supporting production or administrative activities. Instead of relying on total cloud spend, expenses should be allocated to the relevant R&D activities and should be substantiated with evidence and technical documentation. Explore: How can project documentation software deliver the greatest advantage?Transparent and audit-ready documentation establishes a clear connection between the costs incurred and the underlying research activities, helping companies build a traceable and well-supported R&D tax credit claim.
