As of August 2026
Forschungszulage 2026: Facts, rates, limits and requirements
Germany's Forschungszulage (research allowance) is a tax incentive for eligible research and development activities under the Forschungszulagengesetz (FZulG).
In 2026, the standard research allowance is 25% of the assessment basis, while qualifying small and medium-sized enterprises (SMEs) can apply for an increase of 10 percentage points, resulting in a 35% rate. For eligible expenses incurred on or after 1 January 2026, the annual assessment-basis ceiling is €12 million.
For qualifying R&D projects beginning on or after 1 January 2026, the FZulG also provides a 20% flat-rate amount for additional overhead and other operating costs. Eligible own R&D work performed by sole proprietors can be recognised at €100 per documented working hour, subject to a maximum of 40 hours per week.
Forschungszulage 2026 in a glance
| Key fact | 2026 rule | 2026 update |
|---|---|---|
| Standard funding rate | 25% | Standard rate remains 25% |
| SME funding rate | 35% | Qualifying SMEs can receive an additional 10 percentage points upon application |
| Assessment basis | €12 million/year | Increased from €10 million to €12 million for eligible expenses from 1 January 2026 |
| Overhead flat rate | 20% | Applies to qualifying R&D projects beginning on or after 1 January 2026 |
| Own contribution | €100/hour | Increased from €70 to €100 per hour from 1 January 2026 |
| Contract research | 70% | 70% of eligible remuneration for qualifying commissioned R&D |
What is Forschungszulage?
The Forschungszulage, or German research allowance, is a tax incentive designed to support qualifying research and development activities in Germany. It is governed by the Research Allowance Act (Forschungszulagengesetz – FZulG), which was established on 1 January 2020.
Whether an activity qualifies depends on the nature of the R&D project and the applicable statutory requirements rather than simply the company's industry.
- Basic research
- Industrial research
- Experimental development
How much is the Forschungszulage in 2026?
The standard Forschungszulage rate in 2026 is 25% of the assessment basis. Qualifying SMEs can apply for an additional 10 percentage points, increasing the rate to 35%.
The SME increase is available to companies that qualify as small or medium-sized enterprises within the applicable EU SME definition.
The applicable rate is calculated against the company's eligible assessment basis rather than automatically against all R&D expenditure.
What is the maximum assessment basis for the Forschungszulage in 2026?
For eligible expenses incurred on or after 1 January 2026, the Forschungszulage assessment basis is capped at €12 million per year.
The ceiling increased from €10 million to €12 million for eligible expenses incurred after 31 December 2025.
At the 35% SME rate, a €12 million assessment basis corresponds mathematically to a research allowance of up to €4.2 million, where the relevant requirements are met.
- Standard rate: €12 million × 25% = €3 million
- Qualifying SME rate: €12 million × 35% = €4.2 million
Do connected companies each have their own €12 million assessment-basis limit?
No. Connected companies may need to share the €12 million annual assessment-basis limit, rather than each company having its own €12 million limit.
Which R&D expenses are eligible for the Forschungszulage in 2026?
Eligible R&D expenses include R&D personnel costs, eligible own R&D work by sole proprietors and partners, qualifying contract research costs, and certain depreciation costs for eligible R&D assets. From 2026, a 20% flat-rate allowance for overhead and other operating costs may also apply to qualifying R&D projects.
What is the 20% overhead flat rate under the FZulG?
For qualifying R&D projects beginning on or after 1 January 2026, additional overhead and other operating costs can be included as eligible expenses using a 20% flat rate.
The flat rate does not apply to every claim submitted in 2026. It applies only to qualifying R&D projects that begin on or after 1 January 2026.
How are own R&D activities treated in 2026?
A sole proprietor can recognise €100 for each documented R&D working hour, up to a maximum of 40 working hours per week. The rate can also apply to eligible R&D work carried out by partners in a partnership, provided the relevant requirements are met. The amount increased from €70 to €100 per hour for 2026.
How is contract research treated?
For qualifying commissioned R&D projects ordered after 27 March 2024, 70% of the remuneration paid by the commissioning company can constitute eligible expenditure. For commissioned R&D ordered before 28 March 2024, the previous rate of 60% applies.
A company can claim retroactively for an eligible project commissioned in February 2024. The FZulG has no prior commencement clause (Vorbeginnklausel), so an application can be made after a project has started or completed.
How does the application process work?
Applying is a two-step process. First, the R&D project must be assessed and certified by the Bescheinigungsstelle Forschungszulage (BSFZ). Second, the research allowance must be applied for through the competent tax authority.
The BSFZ determines whether the project qualifies under § 2 FZulG. The tax authority considers the eligible R&D expenses and determines the amount of the research allowance.
How does the BSFZ determine whether an R&D project qualifies?
The BSFZ considers whether the project falls within a recognised R&D category and meets the relevant R&D criteria reflected in the OECD Frascati Manual.
- Novelty: new knowledge or results beyond what is already known or available.
- Uncertainty: the outcome or route to achieve it is not known or easily predictable at the start.
- Systematic approach: activities are planned, organised and documented.
- Creativity: original ideas or approaches are involved.
- Reproducibility: the process and results are documented so the knowledge can be verified, reproduced or used by others.
How is the Forschungszulage paid?
It is credited against the company's income tax or corporate income tax. If the allowance is higher than the tax due, the remaining amount is paid as a tax refund.
What is a retroactive Forschungszulage application?
A retroactive application means applying after the R&D project has started or completed. It can generally be claimed for up to four years after the end of the fiscal year in which the eligible expenses were incurred.
Under § 169 AO, the standard assessment period is generally four years. 2021 expenses: deadline 31 December 2025 (passed). 2022: 31 December 2026. 2023: 31 December 2027. 2024: 31 December 2028.
