Forschungszulage in the tax return
Is the Forschungszulage tax-free, how is it booked and when is it paid out — the answers with their sources, for the conversation with your tax adviser.
Last updated: · Help with your application: Research Allowance consulting
In short
Yes. Under section 10 FZulG the allowance is credited against the assessed tax and does not increase taxable profit; any surplus is paid out as a tax refund.
It is offset against your assessed tax. Anything left over is paid out as a tax refund, which is why loss-making companies benefit too.
1. Is the Forschungszulage tax-free?
Yes — it is credited against the assessed tax, not added to profit.
The allowance is credited against the assessed income or corporation tax under section 10 FZulG (section 36(2) no. 3 EStG). Any surplus is paid out as a tax refund (section 36(4) sentence 2 EStG). It does not increase taxable profit — the economic effect is the full amount, not the amount after tax. Nor is it wage tax, even though it is calculated on wage costs.
One caveat belongs here: the Federal Court of Auditors considers the tax exemption “not fully secured in law” and recommended in 2021 that it be written into the statute explicitly. The Federal Ministry of Finance disagrees: wording, legislative history and purpose point clearly to a tax credit. In practice the allowance is treated as tax-free — the debate is about its statutory anchoring, not its application.
2. How is the Forschungszulage booked?
In the commercial accounts as other operating income, against a receivable from the tax office.
The claim arises at the end of the financial year in which the eligible costs were incurred (section 4(2) FZulG). Until the money arrives it is a receivable against the tax office, and the counter-entry is other operating income. This is exactly where many accounts go wrong: income in the commercial books is not taxable profit — for tax purposes the allowance runs through the credit, not through profit determination. When to recognise the receivable, for example only once the BSFZ certificate is in hand, is a question for your tax adviser.
The R&D costs themselves stay where they are. The allowance is not a cost reduction and does not touch the personnel accounts it was calculated from.
3. Where does it go in the corporate tax return?
It is claimed separately, then offset — not entered as income in the return.
After the end of the financial year you file one claim for all projects via Mein ELSTER. The tax office issues a separate notice determining the allowance and offsets it against the assessed corporate or income tax. Taxable profit is unaffected.
4. When is the Forschungszulage paid out?
With the next tax assessment — credited first, the surplus refunded.
The tax office sets the allowance in a separate notice and credits it against your next first-time income or corporation tax assessment; whatever exceeds the tax is refunded. There is no separate payment date, which is why a late tax return delays the money. The faster route runs through prepayments: if the tax return has not been filed yet, the tax office will, on request, reduce them by the assessed allowance, down to zero at most (section 10(2a) FZulG).
5. What happens in a loss year?
You still get the money — as a tax refund.
If the allowance exceeds your tax liability, the surplus is paid out. That is what makes it interesting for young companies: it works without profit, and it is the only R&D instrument in Germany with a legal entitlement rather than a competitive selection.
6. What your tax adviser should have ready
Four documents, and the retroactive window.
The BSFZ certificate, the project documentation, the payroll records the assessment base is derived from, and the contract-research invoices. Claims are possible for four years; for 2022 the deadline falls on 31 December 2026.
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