What Changes for the Forschungszulage in 2026?

TL;DR – Summary

Process Overview

• 1Assessment base increases (2026)
• 2Overhead cost flat rate (2026)
• 335% rate for SMEs (since 2024)
• 4Depreciation eligible (since 2024)

The Act for a Tax Investment Immediate Programme to Strengthen Germany as a Business Location introduces improvements in two stages: the increased funding rate of 35% for SMEs and eligibility of depreciation have already applied since March 2024. From 1 January 2026, a higher assessment base (€12M), an overhead cost flat rate (20%) and a higher hourly rate for own work (€100) are added.

On 18 July 2025, the "Act for a Tax Investment Immediate Programme to Strengthen Germany as a Business Location" was promulgated. This extends the tax-based Forschungszulage. An important distinction must be made between rules that have already been in effect since March 2024 and those that only come into force from January 2026.

New from 1 January 2026

Increase of the Assessment Base to €12 Million

The maximum assessment base increases to €12 million per year. The assessment base consists of the eligible costs of the entitled claimant incurred during the financial year. The increase applies to costs incurred from 1 January 2026 onwards.

In concrete terms:

• For costs incurred after 1 January 2020 and before 1 July 2020, the assessment base is at most €2 million.
• For costs incurred after 30 June 2020 and before 28 March 2024, the assessment base is at most €4 million.
• For costs incurred after 27 March 2024 and before 1 January 2026, the assessment base is at most €10 million.
• For costs incurred after 31 December 2025, the assessment base is at most €12 million.

(Source: Bescheinigungsstelle Forschungszulage, Legal text)

New Overhead Cost Flat Rate (20%)

For projects starting after 31 December 2025, in addition to personnel costs, 70% of contract research costs in the EU/EEA, the flat rate for sole traders of €100 per hour at a maximum of 40 hours per week, and depreciation on assets, additional overhead and other operating costs are also taken into account. The overhead and operating costs to be recognised as eligible costs amount to a flat rate of 20% of all other eligible costs incurred in the respective financial year.

Increased Hourly Rate for Own Work (€100)

The flat-rate amount for work performed in-house increases from €70 to €100 per hour. If an innovation project is carried out wholly or partly by a sole trader or by partners of an entitled co-entrepreneurship (Mitunternehmerschaft), these costs are recognised via a flat rate — for a maximum of 40 working hours per week. The Wachstumschancengesetz of 27 March 2024 raised this amount from €40 to €70 per working hour. For all activities commenced or performed after 31 December 2025, the amount rises to €100 per working hour — even if the project started before this cutoff date.

Improved Depreciation Options

Through the amendment of Section 7 of the Income Tax Act (EStG), costs for investments can be claimed for tax purposes with higher amounts in the first years (declining-balance depreciation). This applies to movable fixed assets acquired or produced after 30 June 2025 and before 1 January 2028. In the application for the Forschungszulage, these new rules may also be applied when accounting for the depreciation of assets used in the project being funded.

Already in Force (since 28 March 2024)

Higher Funding Rate of 35% for SMEs

Small and medium-sized enterprises (SMEs) already benefit today. Since 28 March 2024, SMEs receive an increased allowance of 35% on their eligible personnel costs (previously 25%). For large companies, the rate remains at 25%.

Eligibility of Depreciation

In principle, depreciation on movable fixed assets (e.g. machines, laboratory equipment) used in the course of the innovation project has been eligible since March 2024. This applies to acquisitions made after 27 March 2024, provided the project also started after that date.

Contract Research: 70% Claimable

There has also been an improvement for contract research. Costs for externally commissioned innovation work can be included in the assessment base at 70% (instead of the previous 60%) since 28 March 2024.

Conclusion

The reform of the Forschungszulage takes place in two major steps. If you are an SME engaged in innovation, you already benefit today from the 35% rate. From 2026, the instrument becomes even more attractive and easier to handle thanks to the overhead cost flat rate and the higher assessment base. It is worth factoring these stages into your long-term project planning.

"Many startups and SMEs, including those in the industrial sector, can have their day-to-day work funded. Many companies are innovative, many conduct research and development through new products and processes. The changes strengthen the innovative capacity of German companies.

— Erich Lehmann, dieforschungszulage.de