Research Allowance Act (FZulG)

The research allowance amounts to 25%, or 35% for SMEs, of the eligible base amount. The maximum funding available is 2.5 million euros per fiscal year, or 3.5 million euros for SMEs. The following types of research are eligible for funding:

• Basic research
• Industrial research
• Experimental research

Eligible applicants are, in principle, taxpayers as defined by the Income Tax Act and the Corporate Tax Act who are conducting a qualifying research and development project.

The research allowance is granted through a two-step application process. The process involves:

1. Applying for the R&D certification from the Certification Office for Research Allowances (BSFZ).
2. Submitting the subsequent application for the research allowance to the relevant tax office.

Unlike traditional, direct project-based funding, there is a legal entitlement to the allowance if the eligibility criteria are met (no “first come, first served” principle).

The approved research allowance is generally credited in full against the assessed income or corporate tax due during the next tax assessment. If a surplus arises, the amount is paid out.