Application for research allowance to be simplified by draft law
Tax aspects of research funding through ARTTIC briefly explained.
A new draft law has a positive effect on the research allowance, according to research funding experts at ARTTIC Innovation GmbH. ARTTIC Innovation provides a fact sheet on this topic with answers to frequently asked questions (“FAQ fiscal aspects”), which can be accessed at www.fzulg.eu.
On March 31, 2021, the German federal government passed a draft law to facilitate the implementation of the reform of the real estate tax and to amend other tax regulations (Real Estate Tax Reform Implementation Act – GrStRefUG). The Federal Council approved this bill on May 7, 2021. The draft law will result in some changes for research-based companies wishing to take advantage of the tax allowance of up to one million euros per year.
“Until now, all affiliated companies in Germany and abroad had to be listed. As a result, the application process has sometimes been very time-consuming; in the case of corporate groups and financial investment companies of startups, more than 20 companies had to be named in some cases – for a single application,” says Anne Baumgärtel, Team Lead Germany at ARTTIC Innovation: “This government draft does away with such hurdles and simplifies the applications.”
The GrStRefUG deals, among other things, with so-called affiliated companies. In cases of affiliated companies, the research allowance will now generally accrue to the entities where the expenses for the eligible projects were incurred. According to the government draft of the GrStRefUG, the term affiliated companies in the FZulG will no longer refer to the German Stock Corporation Act (Aktiengesetz), but to the controlling influence between companies based on the German Commercial Code (Handelsgesetzbuch). Each company will submit a separate application for its expenses for the eligible projects. Thus, the controlled companies receive the research allowance whose employees had personnel expenses in the project projects, and not the financial holding company or similar – regardless of profit transfer agreements and joint assessment. The tax office must check which companies are involved before submitting the application. The responsibility of the respective tax office is also affected by the bill.
Baumgärtel: “The Research Allowance Act is a big step in the right direction, and in Germany it is now possible to do what has long been taking place in other EU countries. Tax legislation must support these goals.”
Also easy to read and intended as a brief introduction to the tax aspects of the grant application is ARTTIC’s free fact sheet, available at www.arttic-innovation.eu.
R&D tax credits (Forschungszulage) or ZIM? A choice without agony
R&D tax credits (Forschungszulage) or ZIM? - A choice without agony -R&D tax credits vs. ZIM: The initial scenarioIn practice, small and medium-sized enterprises (SMEs) ask themselves which national funding programme they should pursue for their research and...
Why the carousel of amendments to the R&D tax credit law continues to turn
The R&D tax credits in 2024The year 2024 has proven to be decisive for the German R&D tax credits. Following the most recent amendment as part of the Growth Opportunities Act in March, the Federal Government realized during the budget consultations for 2025...
The R&D tax credit with a blind eye to earnings –
Why loss-making companies (wrongly) hesitate
Recapitulation The German R&D tax credit has become much more popular in recent years after a modest response following the introduction of the instrument. This can be seen not only in advertising and studies by various associations, but also in the bare figures...
