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Jul 30, 2025
How to document R&D hours for a successful Forschungszulage claim
Forschungszulage (Research Allowance) is the tax incentive launched by the government of Germany to promote innovation by providing financial assistance to R&D projects. The programme allows companies with qualified research activities to claim up to 25% (35% for SMEs) of their eligible expenses, mainly the personnel expenditures through the R&D tax credits. To substantiate the claims, it is mandatory to produce accurate and transparent documentation of working hours using the timesheets meant for the R&D activities. Suggested Reading: To learn more about how the Research Allowance works and who is eligible, see our comprehensive Research Allowance guide for 2025.Maintaining a timesheet is not just a formality, it is a significant document that depicts the time spent by the human resources on the project while claiming the research allowance. As per the Federal Ministry of Finance (BMF) and BSFZ, only the hours logged in the documents are eligible for the claim, and the data which is omitted or misrepresented will not be considered during the Forschungszulage application.To ensure the compliance of the applications with guidelines and aid auditing, the BMF has established an official timesheet template. The template is designed to give transparent guidelines for the applicant in order to log their data in the correct format by checking all the mandatory fields. The statutory requirements do not mandate the applicant to follow this template but it is designed with alignment to GoBD. In case the company has multiple projects running simultaneously, it is needed to maintain separate timesheets for each of them.Components of the official timesheetThe timesheet outlines the documentation of the effective working hours in a standardised structure for the companies. There are two main sections in the timesheet showing annual working hours and monthly working hours.1. Annual time calculationThe various aspects of the yearly time recording are ascertained on the basis of the following main points.Contractual working hours: The total effective hours for the year are calculated as weekly hours x 52 weeks. Deductions: Public holidays, vacation days taken by personnel, sick leave, and maternity or paternity leave are subtracted when calculating the effective working hours, as a basis for calculating the percentage of hours spent on R&D out of the total annual working time.2. Documentation of R&D activitiesMonthly data: Over the course of the month, the time spent on each day by each individual performing the tasks should be recorded separately.Project identification: If a company runs multiple R&D projects simultaneously, it is required to maintain different timesheets for the projects. One timesheet is meant for one particular project certified by BSFZ.Details of human resources: While entering the data, the details of the personnel performing the activities need to be recorded clearly including their names, designations, type of R&D work they conducted.Excluded activities: The activities such as administration, management, and logistics are not qualified to be added in the timesheet meant to claim research allowance.Approvals: The data mentioned in the timesheets need to be confirmed and approved by the personnel and project lead by verifying the information and authorised with their signatures.3. Additional guidelinesThreshold: Of the total hours spent on R&D project activities, only up to 40 hours per week, i.e., 2080 hours per year for an individual is eligible, even if the employee works overtime on the project.Retention of documents: Timesheets need to be stored and produced on request of verification of claim and future audits. Reasons why to maintain an accurate timesheetMaintaining an authentic and verifiable timesheet confirms the claim from the company is:Transparent with traceable documents and is audit-proofClarity in terms of the claim based on qualified expenses and effective application.Compliance with the claim and process with the guidelines of BSFZ and Tax office.ConclusionThe Forschungszulage programme offers the financial advantage to the small and large organisations alike, and it's in the hands of the company to make the best out of this government initiative. Following accurate documentation with transparency and verifiable records is one of the important steps in the application process. The timesheet provides clarity to the companies about what information needs to be recorded with regard to the human resources involved in the R&D project and how it is processed under the claim for research allowance. Having an authentic documentation process and effective application helps a company to acquire financial aid in the form of tax credits and elevate their R&D efforts to promote innovation. Connect with innoscripta to know more about the efficient R&D project documentation process and explore user-friendly time tracking software platform to successfully apply for Forschungszulage.
Jul 17, 2025
Forschungszulage application rejected? What to do next?
Overcome a rejected German Forschungszulage application: understand denial reasons, appeal vs reapply tips, and get innoscripta's expert software support.
Jun 30, 2025
Contract Research under the German Research Allowance (Forschungszulage)
The Research Allowance is a top funding initiative by the German government providing monetary support to companies investing in and performing R&D projects. The objective of this programme is to encourage innovation and the eligible research projects that match pre-defined criteria can obtain financial support from the government in terms of tax reduction or cash refunds.The Research Allowance has a wider eligibility criteria where companies across industries including corporations, SMEs, partnerships, sole proprietorship and early-stage start-ups can benefit. The eligibility of the project to receive research allowance is decided based on the defined criteria namely, Frascati Criteria, that include elements such as newness, uncertainty in expected outcomes and structured methodology. The expenditures incurred for the purpose of salaries or wages, materials and consumables used directly in the research, depreciation of movable fixed assets and contract research (up to 70% of the total value) are categorized as the expenses based on which the allowance will be issued, and costs for routine software updates, market research and test marketing are in the list of excluded expenses.A two-step application process is followed for the research allowance, the first step is to obtain a BSFZ certificate that implies the particular project is eligible to receive funding and the second step is the application is to be sent to the tax office seeking the financial support. It calls for carefully drafting the application at each stage with all needed information and proofs to avoid rejections or delay in approvals. The applicant needs to produce documentation, particularly including a project description with proof of innovation and uncertainty in the expected results, details of timesheets and payroll, details of contract research, depreciation details of movable fixed assets used for the research purpose, and details of other funding received if any.Out of these expenses, contract research catches attention regarding its definition, how it is funded, the eligible amount, and the criteria for the application. Contract research means a research project in which the principal researcher outsources the research activity to the third party research institution. The third party research institution could be an academic institution, research institution or another company. In the year 2025, as per the recent update, up to 70% of the total expenses are allowed to claim the research allowance. The research allowance application is to be submitted by the commissioning party and not the contractor as the former is entitled to receive the financial support.Contract Research vs In house ResearchWhat is Contract Research?Contract Research takes place when the R&D project is outsourced to a third party, for example, a research institution, university or private organisation. In the case of contract research, the company (not the service provider) is eligible to apply for the research allowance.Eligibility criteria:The official contract between the parties is mandatoryThe contractor is not eligible to claim the research allowance, the commissioning party alone can apply.The contract research should meet the pre-defined criteria of an R&D project.Note: The application for the research allowance must always be submitted by the client (commissioning party) – not by the commissioned research institution (contractor). Only the client is entitled to apply for and claim state funding for the costs incurred in the context of contract research.Funding details for Contract Research as per new updates:70% of the total contract value is eligible (previously it was 60%)17.5% is the effective funding rate; it is 24.5% in the case of SMEsSample Calculations:1. Calculating the eligible amount to claim the research allowanceTotal cost - 10,000,000Percentage of eligible expenditure - 70%Eligible expenditure = 10,000,000 x 70% = 7,000,0002. Calculating the research allowance for companies with standard rate of 25%7,000,000 x 25% = 1,750,0003. Calculating the research allowance for SMEs with the rate of 35%7,000,000 x 35% = 2,450,000The effective funding rate will be 17.5% for the companies and 24.5% will be for the SMEs.The effective funding rate is derived as the following,4. For the companies with standard rate:Eligible amount x Subsidy rate/Total expenses7,000,000 x 25% / 10,000,000 = 17.5%5. For the companies with SMEs rate: 7,000,000 x 35% / 10,000,000 = 24.5%What is In-House Research?The R&D activities conducted using their own resources throughout the project are termed as internal research or in-house research. Here, 100% of the expenditure is considered while applying for the research funding and 25% is the standard funding rate, and for SMEs, it is 35%.Sample Calculations:1. Calculating the eligible amount to claim the research allowanceTotal cost - 10,000,000Percentage of eligible expenditure - 100%Eligible expenditure = 10,000,000 x 100% = 10,000,0002. Calculating the research allowance for companies with standard rate of 25%10,000,000 x 25% = 2,500,0003. Calculating the research allowance for SMEs with the rate of 35%10,000,000 x 35% = 3,500,000Overview of key differencesElementsContract ResearchIn-House ResearchEligibility70% of the total eligible R&D costs100% of the total value of the total R&D costsEffective funding rate17.5% for other companies and 24.5% for SMEs25% standard rate and 35% for SMEsIdeal forCompanies without the R&D teamCompanies with an expert R&D teamFunding received byCommissioning party (not the contractor who works on the project)The same organisationConclusionContract research is an option taken by the companies venturing into an R&D project but do not have a strong internal R&D team. The research project should meet all the pre-defined criteria to be eligible for the financial support from the government in the form of research allowance. The application process to obtain research allowance remains the same as for in-house research in the case of contract research, first to apply for the BSFZ certificate and upon receiving the certificate one should proceed to apply to the tax office seeking the monetary benefits in terms of tax reduction or cash refund.
Jun 17, 2025
Founders Plan Selective Share Purchases to Support Share Price
Munich, June 17, 2025 — The two primary innoscripta SE shareholders, Michael Hohenester (through Hohenester Beteiligungs-UG) and Alexander Meyer (through Meyer Beteiligungs-UG), have announced their intention to purchase a limited number of innoscripta SE shares through the stock exchange. The total volume is planned to be up to €12 million, with €10 million from Hohenester Beteiligungs-UG and €2 million from Meyer Beteiligungs-UG.The acquired shares are subject to existing lock-up obligations and may be sold no earlier than after the respective periods following the IPO have expired. Any subsequent sale will only be considered if there is a substantial and sustained recovery in the share price compared to the IPO placement price of €120. Attention will be paid to a market-compatible increase in the free float.This initiative is exclusively financed from the shareholders’ private funds and demonstrates their long-term confidence in innoscripta SE’s business model and prospects.
Jun 10, 2025
Cabinet draft provides for 20% flat-rate surcharge and increased funding cap for R&D tax incentive starting in 2026
Cabinet draft 20 percent flat-rate surcharge and increase in funding to €12 million for R&D Tax incentive from 2026 More funding for R&D projects
Jun 05, 2025
Documents required to apply for Forschungszulage (Research Allowance)
Forschungszulage (Research Allowance) is the financial aid in the form of tax credit or cash refund given to the companies with eligible Research and Development projects. The Research Allowance Act was introduced in the year 2020 with the aim to promote innovation and give opportunities to companies across sectors to receive financial support for their R&D projects.The application process to apply for the Research Allowance is classified into two stages,Application to receive a BSFZ certificate, which states whether the project meets eligibility criteria to receive the allowanceApplication to the tax office, where the project receives financial aid from the government in the form of tax deduction or cash refund.Application for BSFZ certificateThe first step to complete for obtaining the Research Allowance is to acquire the BSFZ certificate which certifies that the project falls under the category of R&D and is eligible to receive monetary benefits.Documents required to apply for BSFZ certificateThe BSFZ application needs the applicant to produce the following,1. Detailed project description:It is mandatory to describe the projects, including all the information and the points indicating the project is from the R&D category. The project description should include,Objectives of the particular R&D projectMethodology employedUncertainty in the results or scientific challenges in the outcomeNewness in the expected result of the project2. Details of the organisation:It is required to submit all the necessary information about the organisation in the application and it involves:Legal name and official registration number of the organisationOfficial Tax IDManagement or ownership structureDetails of the line of business3. Details of timelines:The information regarding the actual timelines for the completed projects and scheduled timelines for the ongoing ones needs to be given in the project description for obtaining the BSFZ certificate. The timelines consist of,Start and end datesStages of the project and milestones achieved4. Details of human resources:The BSFZ needs the information about the number of people involved in the projects, the hours or time they've worked for the project, and the remuneration. The information should be given about,Total number of human resources and their rolesCost incurredDetails of work packages or tasks and any other equipment or infrastructure involved in the project5. Details of collaboration or contract (if any):If the R&D project is done along with another institution or if it is outsourced to another organisation under a contract, every detail regarding that needs to be presented in project details while applying for the BSFZ certificate. This is one of the key factors against which the eligibility of the project will be measured. The details involve,Name of the partners and the roles they handled in the project (e.g., research institutions, academic institutions or universities)Full information of the legal agreements and contract details to validate the eligibility6. Details of other funding (if any):The applicant must provide the details if any part of the project received funding previously, especially if from the European Union, similar to the Research Allowance. In this instance, subsidizing the same costs twice is not allowed.Note: The application with all the required information is to be submitted to the BSFZ portal online. The ELSTER certificate is needed to proceed with this application to receive the BSFZ certificate stating the eligibility of the project for the Research Allowance.Application to the Tax OfficeAfter obtaining the BSFZ certificate, the applicant needs to file an application with the tax office in order to acquire the research allowance. This application process is online and is done via ELSTER.Documents required for the application to the tax office1. Details of the company:It is required to clearly mention all the information about the company including Tax ID, details of representatives, legal form of business and headquarters.2. Details of project:This includes,BSFZ certificate numberProject titleID as issued by BSFZ3. Details of expenses:The clear and authentic information regarding the expenses incurred for the particular R&D project should be given on the basis of given elements,Human Resources expenses such as salaries or wagesDepreciation on movable fixed assets which are used for the purpose of the research projectDetails of contract research, if any, and applicant should note that only the 70% value of outsourced contract research is eligible to be considered for the research allowance4.Timesheets:The documents that show the accurate number of hours logged per person should be presented for the Research Allowance application with the tax office. The document should be GoBD compliant and it is used to verify personnel efforts for the particular project.5. Information of other funding received (if any):Any other funding received from the state or EU for the same expenses incurred should be avoided to prevent double fundingWhy rigorous documentation matters?Rigorous application is the foundation of successful Forschungszulage (Research Allowance) application in Germany. The application for the BSFZ certificate and tax office gives deep value to the clarity of information submitted, transparency, consistency and traceability of the projects' expenses related documents.1.Validation of R&D eligibility:The BSFZ certificate will be issued to those projects which match the eligibility criteria as per German definitions and EU. These are not vague statements and the project should meet the absolute criteria containingNewness (Innovation and novelty)Technical uncertainty in expected outcomesSystematic methodologiesNote: When the project fails to show its technical uncertainty in results and risk, there is a high chance that a BSFZ certificate might be denied even for an excellent research project.2. Financial validation:Once the BSFZ certificate is granted, in the second step, the tax office will verify all financial aspects of the application including,Records of payrollTimesheetsDepreciation schedulesContract research3. Restraining delays and rejection:Ambiguous documentation may cause problems such as,Delays in acquiring the BSFZ certificate or approval from the tax officeRejection of applicationA lower amount of funding received due to only partial expenses could be validated. 4. Legal obligation:Applicants mandatorily affirm that all submitted information is correct, accurate, possess documents that support the claim and no other funding has been received for the exact expenses previously.5. Consistency of information:Since the application for Research Allowance is mainly done through online portals like BSFZ and ELSTER, it is crucial to maintain uniformity of project details across all these platforms to avoid any discrepancies.
May 21, 2025
A Step-by-Step Guide to Applying for Germany’s Forschungszulage (R&D Tax Allowance)
The Forschungszulage is the leading Research and Development tax incentive programme in Germany, providing monetary support to companies in the innovation and research space. From an established company investing in novel experimental development to a deep-tech start-up, the Forschungszulage can be a platform to receive financial assistance and obtain cost-efficiency. The application for Forschungszulage is a two-step process, which requires the applicant to have a strong understanding of eligibility, documentation of project details and submission of application along with administrative discipline.This article educates readers on how to make a successful Forschungszulage application and gives comprehensive and clear details about obtaining a BSFZ certificate and receiving financial aid from the tax office.Eligibility and TimingWho qualifies (Who can apply)One of the highly beneficial features of the Forschungszulage is its broad inclusiveness. Any business entity in Germany which is taxable can submit the application to seek financial support in terms of tax reduction or refunds, regardless of its size, industry, or legal form. It includes:1. GmbHs, AGs, UGs2. Partnerships (GbR, OHG, KG)3. Sole proprietorships4. Early-stage start-ups earning lower revenue or facing financial loss.Note: The application is not validated based on the revenue the company has generated, so there is no minimum revenue bar to apply, and any R&D project matching the requirements across industry can apply, as it is not only limited to any certain industry.What Types of Projects Qualify?The projects must align with the pre-defined criteria mentioned under Frascati Criteria, that classify research activities into1. Basic research: The ones that have no immediate or commercial application of research findings.2. Applied research: Applied research conducted to solve a certain problem or to obtain specific objectives as results. 3. Experimental research: The research aimed at developing a new or enhanced product, service, or process.Note: The costs incurred during the activities such as market research or routine system updates are not eligible to seek financial support or apply for Forschungszulage, and all the projects eligible should possess the elements of newness and uncertainty in the project’s desired results. Retroactive Application & DeadlinesIt is now possible for the projects that meet the eligibility criteria to apply for Forschungszulage retroactively from 1 January 2020. This is generally helpful for companies that have already started with innovation or research and development before the initiation of subsidies.There is no rigid deadline to apply for Forschungszulage, and it is best practice to align the BSFZ application with the present financial year and submit the application to ensure timely review and approval by the tax office.BSFZ Certificate ApplicationThe first requirement for the successful Research Allowance application is to receive the BSFZ certificate issued by Bescheinigungsstelle Forschungszulage (Research Allowance Certification Office). This certificate verifies that the project is qualified as a Research and Development project under the German subsidy law.The following is a step-by-step guide to applying for the BSFZ Certificate.Step 1: Acquire an ELSTER CertificateTo access the BSFZ portal, it is required to authenticate the identity of the applicant using an ELSTER organisational certificate.What is ELSTER?Electronic Tax Return (ELSTER) is the official platform employed by the tax authorities of Germany for online communication with taxpayers.How to obtain ELSTER? Go to www.elster.de and register. Once registered, an ELSTER certificate is provided.Why is ELSTER needed?ELSTER confirms that the Research Allowance is applied only by the authorised representatives of the company and not by any other parties.Step 2: Register on the BSFZ PortalAfter acquiring the ELSTER certificate, applicants need to follow the steps given below to register on the BSFZ portal.Visit https://portal.bescheinigung-forschungszulage.deLog in to the portal with the ELSTER credentialsRegister the organisation by creating the BSFZ user profile that is tied to the ELSTER loginNote: This BSFZ user account allows the applicant to begin and manage applications for BSFZ certificates for Research and Development projects.Step 3: Preparation of the ApplicationThe application for the BSFZ certificate primarily focuses on validating the R&D nature of the projects, and minimal or no focus is given to the commercial value of the project during this stage.During the preparation of the application, the applicant is required to:1. Explain the project details, inclusive of the following information:Project title and durationObjectives of projects and their characteristics showing innovationDetailed scientific and technical details of the project including the challengesMethods or processes employedTimelines and work packageDetails of human resources involved in the project2. Categorise the type of R&D projectIt is important to categorise the research projects as basic research, industrial research, or experimental development based on its features and outcome clearly while submitting the application for the BSFZ certificate.3. Highlighting information or reference to support the claimThe applicant can mention the references they used such as OECD Frascati Manual to support the claims they have made in the application.Note: A sample of BSFZ certificate is available on their official website which could be referred to structure the project description to ensure the higher acceptability.Step 4: Submitting the applicationThe application is submitted on the BSFZ portal using online mode and it is possible to submit the application during the start, on an ongoing basis, or after the completion of the project. The retroactive applications are also allowed for any costs that were incurred after January 1, 2020.Once the application is submitted, the BSFZ starts with the assessment of the project mainly based on whether the project qualifies as R&D or not. The BSFZ might get back to the applicant if any further information or clarifications are needed about the project.Step 5: Issue of BSFZ certificateOnce the BSFZ office accepts the project as eligible, the applicant will receive a formal certification on their BSFZ portal. Plus, this certificate will be automatically sent to the local tax office for the further process involved in granting financial aid.The BSFZ certificate alone does not yet imply any financial grant but states that the project is eligible to receive funding.Application to the Tax Office for Forschungszulage (Research Allowance)After receiving the BSFZ certificate the next step is the application to the Tax office to receive Forschungszulage (Research Allowance). The application for the monetary aid will be sent to the local tax office along with the annual tax return.The process to submit the application involves the following steps:Use the ELSTER to login to the tax portalNavigate to the tax return formUpload BSFZ certificateGo to the 'Forschungszulage' section of the tax return formFurther, the applicant will be asked to provide the following details:The cost incurred for materials and the human resources as verified by the BSFZThe details of project timeline and project categoryDetails of subcontractors if anyNote: The applicant should be careful that the values or amounts they mentioned are the same as the ones they submitted to the BSFZ office. The differences in them could lead to the rejection of Research Allowance.Common Mistakes to AvoidForgetting to upload the BSFZ certificateSubmitting partial or incomplete informationMentioning the unapproved expenses which are incurred for processes other than R&DLack of uniformity in given information due to minimal internal coordination with the finance team or tax advisorsCalculation and PayoutThe funding or subsidy rate is calculated using the following bases,For the general companies: 25% of eligible R&D expensesFor the Small and Medium Enterprises (SMEs): 35% of the eligible R&D expensesAs per the new updates for the year 2025, the maximum eligible R&D costs for the business is €10 million per year and the subcontractor expenses are eligible up to 70% of the total approved value.The Forschungszulage (Research Allowance) is given as a reduction to the companies. In case of no tax liability or the tax liability is less than the allowance, a cash refund would be given to the business.Post-Submission ExpectationsGeneral timelinesBSFZ will generally take 2 or 3 months to provide an update either in terms of approval of BSFZ certificate or the rejection of the application. Tax office typically takes further 3 to 6 months to validate the application, so the total turnaround period will be 4 to 9 months from the date of first application submission.Record keeping guidelinesBased on GoBD rules, all the files and documents need to be maintained for the period of 10 years. The documents involve:BSFZ certificateTax filing documentsInformation about the cost analysis and timesheetsUpdates on the projects and the outcomesConclusionWith several options like broader eligibility criteria, retroactive application, and cash refund, the Forschungszulagengesetz (Research Allowance Act) is one of the significant R&D funding initiatives across the European Union. Understand the process and ensure a timely submission of the application in each stage to obtain the financial support to scale up the innovation.
May 20, 2025
Research Allowance: Everything you need to know (2025)
Research Allowance (Forschungszulage) continues to be a hot topic for the stakeholders involved in various Research and Development projects across Germany. The initiative intended to strengthen innovation, the Research Allowances from the government give an opportunity to reduce the R&D expenses through tax credits or refunds. The environment around Research Allowance is changing and evolving with a high funding rate for Small and Medium Enterprises, expansion in the eligibility criteria, and changes in the application process making it easier to access.Here is a glimpse of information you need to know about Research Allowance in Germany in 2025.What is Research Allowance (Forschungszulage)The Research Allowance is a government funded initiative meant for promoting and accelerating R&D projects. Businesses receive monetary benefits or relief in terms of tax credit or direct refund from the german federal government on their research expenses. The objective of Research Allowance is to make innovation more affordable and it complements other funding opportunities at the national level and from the European Union making it a key player in Germany's Innovative initiatives.Unlike the traditional funding methods, there is no competition in getting Research Allowance. The projects meeting predefined criteria are eligible to receive this monetary assistance from the government.Quick Facts:ElementDetailsLaunch Year2020Total Claimed (2024)Over €2.5 billionType of SupportTax credit or cash refundMaximum Eligible R&D Costs (2025)€10 million per company per yearWho can benefitSMEs and Large Scale Enterprises: SMEs and large scale enterprises across industries are eligible to seek Research Allowance. This ensures that the innovation is promoted in each scale and level of business among multinational companies and regional companies.Individual Innovators/Researchers and Partnerships: Independent researchers or partners, entrepreneurs, freelance R&D professionals are fully eligible to apply for Research Allowance. The partnerships or sole owners benefit equally similar to SMEs and larger scale enterprises with the rate of allowance varying based on the project criteria.Start-ups: The start-ups focusing on transformative fields like technology, biotech, healthcare, sustainable development and manufacturing are given substantial importance. The government identifies the start-ups facing high costs involved with R&D with scope of limited revenue in early stages and emphasizes on assisting them with financial allowances.Is your company classified as a 'firm in difficulty'? Special rules may apply if the company is termed a 'firm in difficulty.' Check our guide now to learn how it could impact your eligibility for Research Allowance.Types of Eligible ResearchBasic research: The research with the objective of acquiring more knowledge on subject matter without particular application and which are theoretical and experimental in nature.Industrial research: The research conducted to acquire new knowledge or knowhow, to develop a new product, process or service methodology, or significant enhancement of existing ones that are planned and executed.Experimental development: The systematic and application oriented research aimed at developing new products. Creating a new device with market requirements using the existing knowledge will be an example.The broader eligibility establishes that both innovators and scientists can claim the financial support from the government for their R&D endeavours.The routine product or software updates, research done to assess market conditions, and test marketing or commercial production trials are the exclusions in claiming the financial support from the government.Special Focus: SMEs and Higher RatesSmall and Medium Enterprises which account for a wider part of German Enterprises contribute around 54% of the country's Research and Development investment and presently receiveHigher funding rates (up to 35%)Simpler documentation requirementsPriority in certification processes.Application ProcessThe application for Research Allowance is a two-stage process:Technical project application stage:The researcher should prove that the project meets the set criteria and qualifies as an R & D project by submitting a project description to the Certification Office for Research Allowance (BSFZ). Projects must display the actual research features as per the Frascati Criteria, which act as the international standard to define the activities considered Research and Development. Upon the project being accepted, a certification will be issued for the R&D project and forwarded to the Tax Office for further processing to receive the funding.What is required at this stage:● Clear details and articulation of the project with the technical problem it is solving ● Description of scientific uncertainties involved in the project outcome ● Methods and milestones of the project ● Expected results or outcomes from the projectExplore our detailed guide to the complete list of documents required to apply for Research Allowance (Forschungszulage).General timelines:● 6 to 8 weeks of review time. ● Approval rate is approximately 80 to 85% for the well-prepared applications.Tax Authority Stage:When the first stage is about proving the project falls under the R&D project category, the second stage is about the project costs.The project's costs are annually claimed with tax returns, it is needed to submit the project cost details through the annual tax declaration. It could be claimed as a reduction in tax payable and in case of no tax liability, the cash refund will be given.Note: It is also possible to claim the Research Allowance retroactively for the project started on or after 1st January 2020, which means along with ongoing projects the completed ones are eligible to receive the monetary benefits.Funding and BenefitsIn the year 2025, the Research Allowance provides significant financial assistance.CategoryAmountBase Rate25% of eligible expensesSME Enhanced RateUp to 35%Maximum Eligible R&D Costs€10 millionWhat costs are coveredEligible R&D expenses include,Human Resources cost: Costs incurred as salaries and wages of research personnel, both internal and external human resources.Contract Research: Costs incurred in outsourcing of eligible research activities to another company based in EU (up to 70% contract value)Materials and Consumables: If they have been directly used in the research process.The costs incurred for the activities such as marketing, administrative costs and customary testing are not covered under Research Allowance.Example Calculation: If a company spends €2 million on R&D: Base Funding (25%): €500,000 tax credit. SME Rate (35%): €700,000 tax creditWhat is new in 2025 (Key updates in 2025)The German government introduced notable updates to the Research Allowance Act (Forschungszulagengesetz, FZulG) intended to accelerate innovation among businesses of all sizes. The updates were presented through the Growth Opportunities Act (Wachstumschancengesetz) and published in the Federal Law Gazette (Bundesgesetzblatt Teil I Nr. 108, 27.03.2024) officially.Following are the key updates that were brought into effect on January 1, 2025.Increase in the maximum eligible R&D costs:The maximum R&D costs eligible to receive the monetary support were raised from €4 million to €10 million per year.Example calculation with Standard rate and SME rate, Standard rate (25%): €2.5 million per year SME rate (35%): €3.5 million per yearLegal reference: Article 27, Wachstumschancengesetz BGBl. I 2024 Nr. 108 – Page 399Increased funding rate for the SMEs:Small and medium enterprises now enjoy an increased funding rate of 35%. It was increased from the old rate of 25% and it aims at promoting innovation and R&D growth in the German SME sector.Legal reference: Article 27, Amendment to § 3 (3) FZulG BGBl. I 2024 Nr. 108 – § 3Depreciation of Tangible Assets now included:Depreciation on movable, self-produced fixed assets used for R&D projects is now eligible. It is applicable to assets acquired after March 27, 2024, for the sole purpose of R&D projects.Legal reference: Article 27, new § 3 Abs. 4a FZulG BGBl. I 2024 Nr. 108 – Page 399, § 3 (4a)Updated rate for Contract Research:Previously only 60% of the costs of the contract research were eligible to receive research allowance and now it is increased to 70%.Legal reference: Article 27, change to § 3 Abs. 4 Satz 2 FZulG BGBl. I 2024 Nr. 108 – Page 398Increased hourly rate:The sole proprietors and partners working on the R&D project actively are now eligible to claim a flat hourly rate of €70. The older rate was €40 per hour.Legal reference: Article 27, § 3 Abs. 6 Satz 2 FZulG BGBl. I 2024 Nr. 108 – Page 399Faster reimbursement of the Research Allowance:Starting from 2025, companies can offset their research allowance against the quarterly corporate tax prepayments which does not require to wait till the annual tax return. It is beneficial for start-ups in need of crucial funding.Legal reference: Article 26, § 11 Absatz 1 FZulG (new version) BGBl. I 2024 Nr. 108 – Page 400Note: The German Federal Cabinet has approved a draft bill that would increase the maximum eligible expenses for the Research Allowance (Forschungszulage) from €10 million to €12 million, effective for research projects starting on or after 1 January 2026, and expected to be applicable till 2030.Common mistakes to avoidWhen the application process is now simple, there are still the elements one should be aware of to avoid research allowance application rejection. They are,Insufficient information: Not including clear information and technical details on project description often leads to rejection.Misinterpretation: When the activities mentioned as ‘research' does not actually fall in the category of R&D, the application gets rejected. Regular software updates, changes in designs don't qualify for the process.Delays: Missing out on deadlines and late application could lead to rejection even for excellent research projects.Pro tip: Presenting a BSFZ application like a mini-research proposal by displaying the scientific uncertainty the project has, helps the applicant to avoid rejection.ConclusionThe Research Allowance gives numerous opportunities for the companies to pursue and invest in R&D projects and innovation in Germany. The individual researchers, start-ups, SMEs and large scale enterprises, all are entitled to receive the monetary benefits for the able research projects in terms of tax credits or cash refunds. A clear application process and generous amount of funding, it is now the right time to initiate impactful research projects. Elements to keep in mind when you start,Documenting R&D activitiesApplying on timeSeeking expert support when required.Ensure your research projects receive the support it deserves and convert your innovation to a rewarding one.
Apr 24, 2025
innoscripta SE Achieves ISO 27001 Certification
innoscripta SE Achieves ISO 27001 Certificationinnoscripta SE is now officially certified according to ISO/IEC 27001 - the internationally recognized standard for Information Security Management Systems (ISMS). This certification highlights our ongoing commitment to the highest security standards and the responsible handling of sensitive information.What Does ISO 27001 Mean for innoscripta SE?ISO 27001 defines globally recognized requirements for establishing, implementing, and continuously improving an ISMS. For innoscripta SE, this means that all security-relevant processes are systematically reviewed, documented, and regularly optimized. The certification confirms that we actively protect the confidentiality, integrity, and availability of data while minimizing risks in a structured manner.Benefits for Customers and PartnersWith ISO 27001 certification, our customers benefit from a high level of data security, effective risk prevention, compliance with relevant data protection regulations, and increased trust in our transparent and secure operations.ConclusionBy achieving ISO 27001 certification, innoscripta SE meets internationally recognized standards in information security. It ensures that sensitive data is systematically protected, risks are identified early, and legal requirements are reliably fulfilled. Our customers and partners can rely on a high level of security and dependability.
