New Forschungszulage rules for 2026: 20% overhead claim and increased assessment basis

On June 4, 2025, the German government took a remarkable step by adopting the draft for an immediate tax investment programme. One of the key points included in this draft is the enhancement of Forschungszulage (Research Allowance) starting from January 1, 2026. This update is a part of the "Growth Booster" programme, which has the broader aim of strengthening the nation's position as an innovation-driven economy. Furthermore it indicates the focus on developing better conditions for R&D investments by expanding its scope and widening access to tax-based incentives.

Key updates to the Forschungszulage in 2026

The qualifications and eligibility of a research project to claim Forschungszulage are well-defined and the application process includes two steps, namely, acquiring a BSFZ certificate stating the R&D nature of the project and submission of the application to the tax office, where the financial claim will be validated and approved. According to the draft bill adopted by the German Federal Cabinet on June 4, 2025, there are two updates that are highly in favour of companies commencing R&D projects in Germany.

1. Introduction of a 20% flat-rate overhead allowance

In addition to traditional expenses like personnel costs and contract research costs, as per the new updates, a 20% flat-rate overhead operating costs can be claimed. The change is scheduled to be applied to the research projects starting on or after January 1, 2026. This helps companies conducting R&D to obtain increased financial support, as it does not require any additional documents to claim the flat-rate overhead under the research allowance.

2. Increase in maximum assessment basis to €12 million

From 2026, the maximum assessment basis for calculating Forschungszulage will increase from €10 million to €12 million per year. This will result in a research allowance of €3 million and up to €4.2 million for SMEs. Previously, maximum R&D costs were increased from €4 million to €10 million and the new update underlines the country's long-term commitment to nurturing research. It also indicates a futuristic framework that encourages companies to plan for R&D ardently.

The updates are applicable to companies with qualified research initiatives in different sectors and sizes like start-ups, SMEs and large enterprises. The measures are presently scheduled to be applicable until 2030 for research projects commencing on or after 1 January, 2026. 

Conclusion

The changes in Forschungszulage signify more than mere improvements; they reflect the futuristic view and national focus to strengthen innovation and R&D. By expanding the maximum assessment basis and allowing a 20% flat-rate overhead claim, the government is responding to the needs of companies with research projects and promoting innovation and R&D. The process to claim Research Allowance is streamlined with predefined application requirements and this policy increases the effective funding base and makes the programme more attractive to companies to gain the best financial support their research projects deserve.

For companies with a futuristic view, this is an opportunity to plan and align their research projects and leverage the tax incentive programme, as the government is actively building an environment where innovation is not just encouraged but significantly supported.