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Oct 06, 2024

The deadline for determining expenses for 2020 expires this year!

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The research tax allowance was launched as part of an initiative by the BMBF. As a legally regulated state subsidy, it aims to sustainably strengthen Germany as a development location. In accordance with the provisions of the Income Tax Act and the Corporate Tax Act, it enables companies to recognize certain research and development expenses for tax purposes.

The research tax allowance was introduced in 2020 to strengthen the innovative strength and competitiveness of German SMEs. The allowance is open to all taxable companies based in Germany, regardless of industry and size. The funding rate is 25% of eligible personnel costs and 15% for external contract research. The maximum funding amounts to up to 1 million euros annually with an assessment basis of 4 million euros per financial year. In addition, it can be applied for retroactively for up to 4 years.

However, companies should be aware that the deadline for claiming expenses from 2020 ends on December 31, 2024. This means that all expenses incurred in 2020 should be submitted by June 30, 2024 at the latest to benefit from the research allowance. This deadline is crucial because the application process takes time and timely submission is essential for successful funding.

The process of applying for the research allowance begins with submitting an application to the Research Allowance Certification Office (BSFZ). After submission, it can take up to 3 months for an assessment to take place. After that, minus the pre-Christmas period, only about 2.5 months remain to prepare the project documentation and check compliance with the German accounting principles (GOBD). It is therefore crucial that companies initiate the application process in good time in order to meet the deadlines and benefit from the research allowance.

Conclusion

The deadline for claiming the tax research allowance for 2020 is inexorably approaching. Take the chance now and secure your funding! We will help you navigate the process and ensure your application is submitted on time.

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