Starting at the beginning of 2026, tax incentives for research funding will become significantly more attractive. The German Federal Government has revised the Research Allowance Act (FZulG) as part of the Immediate Investment Programme ("Investment Booster"). The goal: to provide companies with more incentives for research and development – with less bureaucracy.

The most important change concerns the assessment base: For eligible expenditures that arise after December 31, 2025, companies can now set 12 million euros (previously 10 million). This results in a maximum allowance of 3 million euros with a subsidy rate of 25 percent. For small and medium-sized enterprises, which already have a subsidy rate of 35 percent, the funding increases to up to 4.2 million euros.

Also new is the introduction of an overhead flat rate: In addition to personnel costs, external services, and depreciation, companies can claim 20 percent for overhead costs as a lump sum. This saves evidence and significantly reduces effort.

There is another improvement for individual enterprises: The calculated hourly rate for researching business owners increases from the current 70 to 100 euros per hour.

The new rules apply to projects starting January 1, 2026.

Further information on the German Federal Ministry of Finance website.