What Is the Forschungszulage?
By Marvin Vocke, Co-Founder Grantonomy · Last updated: 5 August 2026
The Forschungszulage is a statutory, profit-independent research and development subsidy under the German Research Allowance Act (Forschungszulagengesetz, FZulG). It reimburses a share of a company's eligible R&D expenditure – in particular personnel costs and contract research – irrespective of whether the company is profitable. For small and medium-sized enterprises, the funding rate is 35 % of the eligible assessment base, and for projects starting from 2026 the effective rate can reach up to 42 % of the underlying eligible costs.
The procedure runs in two stages: first the R&D certificate issued by the BSFZ, then the assessment by the tax office via ELSTER. This article explains what the Forschungszulage covers, which companies can claim it, which costs count, and where companies most often get it wrong.
Key takeaways
The Forschungszulage is a statutory, profit-independent R&D subsidy under the FZulG and does not depend on a company being profitable.
The procedure has two stages: an R&D certificate from the BSFZ, followed by the assessment at the tax office via ELSTER.
SMEs receive 35 % of the eligible assessment base; for projects starting from 2026 the effective rate can reach up to 42 %.
Eligible costs are in particular personnel costs and contract research.
The Forschungszulage can be claimed retroactively for several past years as well as for future projects.
What is the Forschungszulage exactly?
The Forschungszulage is Germany's research allowance: a subsidy for research and development that is regulated by law in the FZulG rather than allocated at the discretion of a programme office. Two consequences follow from that. First, it is profit-independent, so a loss-making company can benefit just as much as a profitable one. Second, the decisive question is not whether budget happens to be available in a given round, but whether a project meets the criteria for research and development.
This distinguishes the Forschungszulage from classic grant programmes with call deadlines and competitive selection. Companies do not compete against each other; each project is assessed on its own technical merits. The statutory basis can be read in full in the FZulG on gesetze-im-internet.de.
What is assessed is the R&D character of a project, not its commercial importance. A platform that is strategically critical to a company but technically routine does not qualify, while an unglamorous internal component that resolves a genuine technical uncertainty may well do so. This is the single most common source of misunderstanding among first-time applicants.
Which companies can claim the Forschungszulage?
Companies subject to tax in Germany that carry out their own research and development can, in principle, claim the Forschungszulage. The instrument is deliberately sector-agnostic: software companies, AI and machine learning teams, SaaS providers, mechanical engineering firms and industrial manufacturers all fall within its scope, provided a qualifying R&D project can be substantiated. Legal form does not exclude anyone, and company size affects the applicable rate rather than eligibility as such.
Small and medium-sized enterprises benefit from a funding rate of 35 % on the eligible assessment base. Whether a specific company qualifies as an SME within the meaning of the relevant rules must be assessed case by case, as must the treatment of group structures. A more detailed breakdown of the eligibility conditions is set out in the article on who is entitled to the Forschungszulage.
In practice, the harder question is rarely whether a company is eligible but whether its projects are. Many technology-driven companies assume their development work is too incremental to qualify and never apply. Others assume the opposite and submit everything, which weakens the application as a whole.
Which costs are eligible for funding?
It is worth starting with what is not eligible. Ongoing operations, maintenance, bug fixing, customer support, marketing, sales activities and the implementation of known solutions are not research and development and do not belong in an application. The same applies to pure rollouts, configuration work and migrations that use established methods, however time-consuming they may be. A project that cannot point to a genuine technical uncertainty will not carry a certificate, no matter how large the associated cost base.
Eligible, by contrast, are the expenses directly attributable to the qualifying development work, in particular personnel costs for employees working on the R&D project and contract research commissioned from third parties. The precise scope, including how contract research is treated, has to be examined in each individual case. A closer look at the cost side is provided in the overview of eligible costs for the Forschungszulage in 2026.
The pivot on which everything turns is technical uncertainty: whether, at the outset of the work, the technical outcome was genuinely open and could not be resolved by applying established knowledge. That criterion, explained in more depth in the article on technical uncertainty in the Forschungszulage, is what the BSFZ actually examines, and it is where weak applications tend to fall apart.
Component | Value | Applies to |
|---|---|---|
SME funding rate | 35 % | eligible assessment base |
Overhead flat rate | 20 % | projects starting from 2026 |
Effective funding | up to 42 % | 35 % × 1.20 |
"Companies underestimate the Forschungszulage because they think in terms of products, not in terms of technical uncertainty. The moment a team can articulate what was genuinely unknown at the start of a project, the application usually writes itself." – Mohammad Mehrani-Ardabily, Co-Founder Grantonomy
How does the two-stage procedure work?
The Forschungszulage is claimed in two separate steps at two separate authorities. In the first stage, the company applies to the BSFZ, the certification body for the research allowance, for an R&D certificate confirming that the project qualifies as research and development. This stage is purely technical: the BSFZ assesses the substance of the project, not the costs. Further procedural detail is published by the BSFZ.
In the second stage, the company applies to its competent tax office for the assessment of the allowance via ELSTER. Only here do the costs come into play. The tax office is bound by the BSFZ certificate on the question of whether research and development exists, but examines the cost base and the calculation itself.
The separation of the two stages is what makes the process manageable and, at the same time, easy to get wrong. A technically excellent project can fail on poor cost documentation, and a well-documented cost base is worth nothing without a certificate. The practical sequence, including what to prepare when, is described in the guide on how to apply for the Forschungszulage.
How much funding can companies receive?
For small and medium-sized enterprises, the funding rate is 35 % of the eligible assessment base. For projects starting from 2026, a flat-rate allowance for overheads and operating costs of 20 % of the remaining eligible expenditure is additionally taken into account. This increases the assessment base, so that the effective funding can reach up to 42 % of the underlying eligible costs, which is the result of 35 % × 1.20. The 42 % figure is expressly not a new statutory funding rate but the effective rate relative to the base expenditure, in particular personnel costs. Whether the overhead flat rate applies must be assessed case by case.
Because the Forschungszulage can be claimed retroactively for several past years as well as for future projects, completed development work is worth reviewing too. For companies with continuous development activity, this often means a first application covering several years at once, followed by an annual routine.
Grantonomy supports technology-driven companies through both stages, from pre-qualification and the technical structuring of projects to the BSFZ application and the documentation towards the BSFZ and the tax office. Across all applications submitted to date, the approval rate stands at 100 %, and the work is fully success-based: no payout, no fee.
Summary
The Forschungszulage is a statutory, profit-independent R&D subsidy under the FZulG, open to companies subject to tax in Germany that carry out their own research and development. Eligible costs are in particular personnel costs and contract research; routine operations, maintenance, marketing and the implementation of known solutions are not.
The procedure has two stages: the R&D certificate from the BSFZ, then the assessment at the tax office via ELSTER. SMEs receive 35 % of the eligible assessment base, rising to an effective rate of up to 42 % for projects starting from 2026. Since the allowance can also be claimed retroactively, past development work should be reviewed alongside current projects, with the technical uncertainty of each project assessed on its own merits.
Frequently asked questions about the Forschungszulage
What is the Forschungszulage in simple terms?
The Forschungszulage is a statutory research and development subsidy under the German FZulG that reimburses part of a company's eligible R&D costs. It is profit-independent, so loss-making companies can benefit as well. Eligible costs are in particular personnel costs and contract research.
How high is the Forschungszulage?
For small and medium-sized enterprises, the rate is 35 % of the eligible assessment base. For projects starting from 2026, a 20 % flat rate for overheads and operating costs increases that base, so the effective funding can reach up to 42 % of the underlying eligible costs. Whether the flat rate applies must be assessed case by case.
Who applies for the Forschungszulage and where?
The application runs in two stages at two authorities: first an R&D certificate from the BSFZ, then the assessment by the competent tax office via ELSTER. The BSFZ assesses the technical substance of the project, the tax office the cost base. Both stages are required.
Can the Forschungszulage be claimed for past projects?
Yes, the Forschungszulage can be claimed retroactively for several past years as well as for future projects. Completed development work is therefore worth reviewing. The prerequisite is an R&D certificate from the BSFZ for the respective project.
Which projects are not eligible?
Ongoing operations, maintenance, bug fixing, marketing and the implementation of known solutions do not qualify as research and development. Pure rollouts, configuration work and migrations using established methods are also excluded. The decisive criterion is whether a genuine technical uncertainty existed at the start of the work.
Does the Forschungszulage only apply to software companies?
No, the Forschungszulage is sector-agnostic. Software, AI and machine learning, SaaS, mechanical engineering and industrial manufacturing all fall within its scope, provided a qualifying R&D project can be substantiated. What matters is the technical character of the project, not the industry.
