In short: the research allowance (Forschungszulage) is not taxable operating income and does not increase your taxable profit. It is offset against the assessed income tax; any excess amount is paid out as a refund. That is why, in the accounts, it is not recorded as income or revenue, but treated like a tax offset or refund.
Not income, but a tax offset
The most common misconception is to record the research allowance as a subsidy or some other operating income. For tax purposes, that is exactly what it is not: it is not taxable operating income and does not increase profit. Instead, the tax office assesses the allowance and offsets it against your corporation or income tax. There are two cases to distinguish:
- Tax higher than the allowance: the allowance lowers your assessed income tax – your tax burden falls.
- Tax lower than the allowance: the excess amount is paid out as a tax refund – liquidity flows in.
How it is recorded: like a tax refund
Because the allowance is neither income nor revenue, it is not booked through an income account, but like a tax offset or refund. In practice, this means: the claim is shown as a receivable from the tax office, and the contra entry is made as a reduction of the tax expense – not as operating income. This leaves your taxable profit untouched.
Exactly how this is mapped to the accounts in SKR03 or SKR04 depends on the SKR chart of accounts you use and your booking logic, and belongs in the hands of your tax advisor. We deliberately do not name fixed account numbers here, in order to avoid incorrect entries.
The difference from a classic subsidy is important: an investment or operating-cost subsidy usually runs through income and therefore affects profit. The research allowance does exactly the opposite – it is tied to the tax assessment and works like an offset or refund. The point in time at which the claim is recognised as a receivable, and how it is presented in the annual financial statements, are likewise questions that your tax advisor decides based on your individual case.
| Question | Treatment |
|---|---|
| Taxable operating income? | No |
| Does it increase taxable profit? | No |
| Record as income/revenue? | No – like a tax offset/refund |
| Excess amount | Paid out (liquidity) |
Treatment in a loss year or with no tax burden
If you make a loss in a given year, or if no income tax is due for other reasons, there is no tax available to offset against. The consequence: the allowance is paid out in full. That is real liquidity in your account – and that without increasing your taxable profit. So you do not pay tax on the payout. How this payout mechanism works in detail is shown under Payout even without a profit.
The order: first BSFZ, then tax return, then recording
Before anything is recorded, the claim must be established: first you need the BSFZ certificate as proof of the research character, then you claim the allowance via ELSTER in your tax return. Only with the tax assessment notice is the assessed amount fixed, which then feeds into the accounts as an offset or refund. Which expenses count in the first place is clarified by the eligible costs.
Whether your project is eligible is something we check in advance in the free funding check. We take on the BSFZ part – the technically sound application preparation; the subsequent recording and balance-sheet treatment stays with your tax advisor.
Frequently asked questions about recording & accounting
Is the research allowance taxable?
No. The research allowance is not taxable operating income. It does not increase your taxable profit and is therefore tax-free itself – it is offset against the assessed income tax or paid out, without any further tax being due on it.
How is the research allowance recorded?
Because the allowance is neither income nor revenue, it is not recorded as operating income in the accounts, but treated like a tax offset or refund – for example as a receivable from the tax office or as a reduction of the tax expense. Clarify the specific account assignment in SKR03/SKR04 with your tax advisor.
How does the research allowance work in a loss year?
In a loss year, little or no income tax is available to offset against. The portion that cannot be offset is therefore paid out as a tax refund – you receive real liquidity in your account, without your taxable profit increasing.
Does the research allowance increase your taxable profit?
No. The research allowance expressly does not increase your taxable profit. It reduces your tax burden or is paid out, but does not increase profit and therefore does not trigger any additional tax.