Most companies don't fail at the research allowance – they fail at a form. The state pays back up to 35% of your R&D costs through the research allowance (Forschungszulage, FZulG): retroactively back to 2022, technology-open, as a legal entitlement. The hardest step here is not the calculation but the BSFZ certificate. This guide shows what matters – and points to the in-depth detail articles.
What makes the research allowance special
- Technology-open – no sector, no quota, no first-come-first-served race.
- Legal entitlement – not the discretionary decision of an authority.
- Usable retroactively – expenses going back to the year 2022 can still be claimed.
| Parameter | Value (expenses from 2026) |
|---|---|
| Funding rate, standard | 25% |
| Funding rate, SME (EU definition) | 35% |
| Max. assessment base / year | €12M |
| Max. funding / year (SME) | up to €4,200,000 |
| Contract research (EEA) eligible | 70% |
| Overhead flat rate | 20% |
| Owner work (shareholders) | 100 €/h (up to 2,080 h/year) |
The funding rates in detail: Amount & funding rates. All changes from the investment booster: What changes in 2026?
Funding rates over time (2020 → 2024 → 2026)
The terms have been improved several times. For retroactive applications, the time the expense was incurred applies – i.e. the values for the year in which the costs arose:
| Expense period | Rate | SME | Max. assessment base | Contract research | Owner work | Overheads |
|---|---|---|---|---|---|---|
| Aufwendungszeitpunkt 01.07.2020 – 27.03.2024 | 25% | 25% | €4M | 60 % | 40 €/h | – |
| Aufwendungszeitpunkt 28.03.2024 – 31.12.2025 | 25% | 35% | €10M | 60 % / 70 % | 70 €/h | – |
| Aufwendungszeitpunkt ab 01.01.2026 | 25% | 35% | €12M | 60 % / 70 % | 100 €/h | 20% |
How much – and how it's paid out
The amount is your eligible expenses times the funding rate. Three fully worked cases are shown in the example calculation. Important: the allowance is offset against your tax, and any excess amount is paid out – even without a profit. That makes it especially valuable for startups and in loss-making years.
Two doors – one of them sticks
The research allowance runs through two separate procedures. The BSFZ certification procedure assesses on the merits whether your project is research & development within the meaning of the law. Only then does your tax advisor claim the allowance in the tax application at the tax office.
The tax part is routine for any firm. The certificate is the hurdle where things get stuck – not because companies do too little research, but because they describe their research the wrong way.
The costliest mistake: development language instead of research language
The BSFZ assesses against the Frascati criteria: novelty, technical risk, a systematic approach and uncertainty of the outcome. Anyone who describes "testing", "debugging" or "ramp-up to series production" gets a rejection. The same work, phrased as a research hypothesis with an open outcome, gets certified.
- Development language (avoid): "We implemented a feature; after testing and debugging it ran stably." → routine development, not eligible.
- Research language (use): "The starting point was the technically unsolved question of whether process X could be realised stably under condition Y. We formulated hypothesis Z and tested it in prototype form, because the outcome was open at the start of the project."
In-depth, with before/after vocabulary: Research language instead of development language · What the BSFZ rejects: The most common BSFZ reasons for rejection.
Where the line runs by industry
What is eligible is the research share, not the whole project. The dividing line differs by sector – we draw it in a way that holds up under review:
- Software, AI & SaaS: new algorithms and prototypes yes, testing/porting/configuration no.
- Mechanical engineering & engineering offices: up to prototype testing yes, ramp-up to series production and maintenance no.
- Medical technology & biotech: preclinical work and phases 0–IIIa yes, CE approval and regulatory affairs no.
- Defense & security technology: R&D by the general criteria yes, certification and approval no.
To the allowance in five steps
- Clarify eligibility – including retroactively back to 2022.
- Structure the R&D project along novelty, risk and a systematic approach.
- Translate it into research language – including the portal character limits.
- Submit the BSFZ application and secure the certificate.
- Claim it for tax through your tax advisor at the tax office.
The old expense years matter: why the retroactive application is now urgent.
Where we come in
Zulagenlotse specialises in the difficult first part: the BSFZ certificate and the application preparation. In our full support we draw up your ready-to-submit application in line with the review guidelines – the fee is success-based and only falls due once the funding reaches you. Alternatively, we review the application you prepared yourself in the application review. The tax submission stays with your tax advisor.
Work out your potential in the flat-rate calculator or start the free funding check right away.
Frequently asked questions about the research allowance
How high is the research allowance?
The standard rate is 25%, and 35% for SMEs. From 2026 the assessment base is up to €12M per financial year – for SMEs that means up to €4,200,000 of funding per year.
Who is eligible to apply?
Every company subject to tax in Germany that carries out its own research and development – regardless of sector, size or legal form. The allowance is technology-open and a legal entitlement, not a discretionary grant.
What is the BSFZ certificate – and why is it the difficult part?
The certification body for the research allowance (BSFZ) assesses on the merits whether your project even qualifies as research within the meaning of the law. Without this certificate there is no allowance. Most applications fail here – because they describe their work in development language instead of research language.
Can I apply for the research allowance retroactively?
Yes. Expenses incurred from 2022 onwards can still be claimed – up to 4 years retroactively. For the 2022 expense year the deadline is particularly tight.