Maximize Your Business Potential with Germany’s R&D Tax Incentives

Innovation is the cornerstone of progress. Businesses that invest in research and development (R&D) not only lead the way towards a brighter future but also fuel the growth of industries and economies. Recognizing this potential, Germany has designed a lucrative tax incentive program to boost R&D activities. As seasoned tax advisors specializing in German corporate tax law, GHS Tax Advisors is here to guide you through every step of the process, ensuring you maximize the benefits of the German R&D tax incentives. Also foreign companies with German PEs can profit from the incentive.

German R&D Tax Incentive – A Brief Overview

Germany’s R&D tax incentive, known as the Forschungszulage, is aimed at rewarding companies engaged in pioneering research and technological innovation. This program allows companies of all sizes and industries to claim a credit against the cost of their R&D activities. The benefits extend to a wide range of scientific research, experimental development, and innovation projects.

Who is Eligible?

Small and Medium Enterprises (SMEs): With a special focus on supporting the growth of SMEs, these incentives are tailormade to fuel innovation in emerging companies.

Large Corporations: Even established businesses can tap into these incentives to finance new discoveries and enhance their market position.

Cross-industry Applicability: From tech start-ups to established manufacturing companies, the incentives are available for a wide spectrum of industries.

Non-German Companies: Also non-German companies performing R&D in Germany can profit under certain conditions.

How GHS Tax Advisors Can Help

Expert Assessment: Our team of tax experts will evaluate your business’s R&D activities, ensuring they align with the qualifications defined by the German authorities.

Seamless Application Process: We support with the entire application process, from documentation to submissions, ensuring a hassle-free experience.

Maximized Claims: Our specialized knowledge in German corporate tax laws enables us to identify opportunities that maximize your claims.

Continuous Support: Our commitment doesn’t end with a successful application; we provide ongoing support to ensure continued compliance and optimization.

Contact Us Today!

Investing in R&D not only advances your business but also contributes to the broader scientific community and societal growth. Germany’s R&D tax incentive program offers a golden opportunity to enhance your innovation activities without straining your finances.

GHS Tax Advisors is committed to guiding you through this process, ensuring you unlock the full potential of these incentives.

Important information regarding the German R&D tax incentive

1. Eligibility

The Forschungszulage is designed for businesses of all sizes across various industries. It is not restricted to specific sectors, making it applicable to a wide range of companies engaged in R&D activities.

2. Scope of Activities

The tax incentive covers expenses related to fundamental research, industrial research, and experimental development. Covered expenses are wages for research staff, contractual research expenses (in certain cases), and maybe soon also investments for relevant assets.

3. Amount of Incentive

The tax credit rate is a percentage of eligible R&D expenses (25% of eligible expenses). The maximum incentive is EUR 1 Mio (soon maybe EUR 3 Mio.).

Companies must apply for the Forschungszulage and provide detailed documentation to demonstrate that their R&D activities align with the requirements of the incentive program. This includes descriptions of the research projects, evidence of expenses, and any other supporting documentation.

4. Application Process

Companies must apply for the Forschungszulage and provide detailed documentation to demonstrate that their R&D activities align with the requirements of the incentive program. This includes descriptions of the research projects, evidence of expenses, and any other supporting documentation. In total, two application must be made.

5. Impact on Other Subsidies

The Forschungszulage can be combined with other public funding programs. However, certain conditions must be met to ensure that there is no double-dipping of incentives.

6. Tax-Free Benefit

The Forschungszulage is usually tax-free, meaning that the benefit does not count as taxable income for the company receiving it.

7. Legal Basis

The legal basis for the Forschungszulage can be found in the ‚FZulG‘, the law for the tax promotion of research and development.