Research Allowance Act
| Basic data | |
|---|---|
| Title: | Law on tax incentives for research and development |
| Short title: | Research Allowance Act |
| Abbreviation: | FZulG |
| Type: | Federal law |
| Scope: | Federal Republic of Germany |
| Legal matter: | Tax law |
| References : | 610-6-19 |
| Issued on: | December 14, 2019 ( Federal Law Gazette I p. 2763 ) |
| Entry into force on: | January 1, 2020 |
| Last change by: |
Art. 8 G of June 29, 2020 ( Federal Law Gazette I p. 1512, 1515 ) |
| Effective date of the last change: |
July 1, 2020 (Art. 12 G of June 29, 2020) |
| GESTA : | D063 |
| Please note the note on the applicable legal version. | |
The Research Allowance Act (FZulG) is a German federal law and came into force on January 1, 2020. It introduces tax incentives for personnel costs for research and development projects in the form of a research allowance. The funding is to apply indefinitely, but the effect of the law is to be reviewed after 4 years.
The Research Allowance Act is an ancillary tax law to the Income Tax Act and the Corporate Income Tax Act and applies equally to all taxable companies , regardless of their size, the respective profit situation - however, "companies in difficulty" (without exception) i. S. d. AGVO excluded - and the corporate purpose. The research allowance is not based on the assessment basis for determining income, nor on the tax to be assessed. It should have the same effect on all companies regardless of the respective profit situation.
The law stipulates that all companies that conduct research and are taxable in Germany can have 25% of their eligible personnel expenses for research and development reimbursed after the end of the respective financial year, upon application to the tax office, by crediting them with the fixed income or corporation tax. Relevant expenses that are not already funded elsewhere or that exceed the specified cap or certain (lower) de minimis limits are eligible under the law.
A certificate of eligibility for the R&D project is required for the application. This is to be issued by a certification body that has yet to be set up in the course of 2020. R&D projects that were started or commissioned on January 1, 2020 at the earliest will be funded.
The Research Allowance Act was passed as a draft law by the federal government on May 22, 2019 and received the approval of the Federal Council on November 29, 2019. According to publications from the IHK organization, "the legal certainty in handling the research allowance has been increased" in the legislative process. Before the law came into force, provisions on the eligibility of clients for contract research were also added. In the case of contract research, the client is funded and the eligible wage costs are set at a flat rate of 60 percent of the contract amount.
criteria
The beneficiary R&D projects are defined in § 2 FZulG. In principle, the beneficiary R&D activity should be determined by the following five criteria : The R&D activity must
- aim at gaining new knowledge (novelty),
- based on original, non-obvious concepts and hypotheses, thus being creative,
- be uncertain about the outcome,
- follow a plan and be budgeted (systematics),
- lead to results that can be reproduced (transferability / reproducibility)
Examples of possible projects eligible for funding have already been given by experts.
Certification body
In Austria, only three criteria for the research allowance very similar & D tax credits were introduced in Germany during five criteria are established by law. It remains to be seen how the German research allowance will be accepted by companies. Much depends on the certification body , which will be set up in Germany in August 2020. The certification body assesses whether submitted projects are recognized as R&D projects and issues corresponding certificates, which are then used by German tax offices as the basis for funding. The Research Grant Certification Ordinance (FZulBV), which came into force on August 1, 2020, regulates details on the subject, tasks and application review ( BGBl. 2020 I p. 121 ).
criticism
The limitation of the assessment base and research allowance per beneficiary and year appears sensible, so that large companies cannot take unlimited allowances with them. However, the lifting of the limitation of eligibility to SMEs alone was the aim of the initiators of the legislation. Furthermore, SMEs in particular are given far less consideration in certain case constellations.
Eligible R&D activities within the meaning of this Act can also be carried out personally by small businesses (sole proprietorships) and company shareholders. In this case, however, according to the text of the law (§ 3 Paragraph 3), the funding is in fact limited to 40 euros per hour. This means that not only is the subsidy itself dramatically below the minimum hourly rate that a technical individual entrepreneur or shareholder must necessarily achieve, but the assessment basis is also drastically lower. This will deter technically experienced sole proprietorships and shareholders who would like to get personally involved in an R&D project. For technically oriented SMEs, this means, especially when owners are particularly technically savvy, the opposite incentive for them to contribute personally with their abilities or motivation presumably superior to their employees, which should actually be desirable.
Eligible R&D activities cannot be funded under this law if the personnel expenses are already funded elsewhere. This discourages companies from including employees who are supported due to participation measures due to disabilities or long-term unemployment. This harms the employees, since they are made second-class employees with regard to possible participation in R&D projects, and the companies, since it is now equally more financially beneficial for them to deploy the employees in less progress-oriented work than if it is this Funding Act would not even exist, and the research landscape, because there are fewer incentives to conduct research than the law itself (for everyone else) provides. In particular, companies are disadvantaged from this point of view, which already take it upon themselves to employ people with disabilities or the long-term unemployed.
Individual evidence
- ↑ LAW & TAXES - Heilbronn Chamber of Commerce. Retrieved January 3, 2020 .
- ^ Draft and official justification on BT-Drs. 19/10940
- ↑ New research allowance law brings tax relief for companies - IHK Weingarten. Retrieved January 3, 2020 (German).
- ↑ Research Allowance Act passed - IHK Stuttgart. Accessed January 4, 2020 (German).
- ↑ Research allowance - EXAMPLES OF SUCCESS - Projects. Retrieved May 22, 2020 (German).
- ^ The tax research premium in Austria. Retrieved on May 22, 2020 (Austrian German).
