Tag: investing

In recent years, Germany introduced a new federal R&D incentive known as the Research Allowance (Forschungszulage) to support business innovation. Prior to this change, Germany historically offered generous direct grants for research projects but had limited tax credits. The Research Allowance Act (Forschungszulagengesetz), which came into effect on January 1, 2020, now provides companies of all sizes with a refundable tax credit for qualifying research and development activities. This post explores how the Research Allowance works, including qualification criteria, how the credit is calculated, documentation requirements, payout mechanisms, and how it compares with the U.S. federal R&D tax credit.