New tax incentive in Germany
There are numerous national and European funding instruments that provide additional R&D funds but must be applied long before the project starts. The new German Tax Incentive for R&D funding, on the other hand, refinances R&D projects of all kinds that are already underway or even completed. Retroactively from 2020 on, innovative companies can receive up to EUR 1,000,000 per year for research, development and innovation activities.
In principle, all R&D-driving taxable companies and start-ups in Germany can apply for the tax incentive for any number of projects with no thematic restrictions that were started after January 2nd, 2020, and can be assigned to either basic research, industrial research or experimental development.Inspiralia/m27 assists clients with the whole tax incentive submission process, ensuring that they save time and money. In addition to an administrative check for eligibility, m27 also provides support in preparing the technical application documents.
While the tax incentive is a tax-based funding instrument, it can lead to an immediate increase in liquid funds, especially for start-ups or cost-intensive companies since a granted tax incentive reduces the income tax accordingly and any remaining amount of the tax incentive is paid out to the company. If the current tax payment is even zero, the entire tax incentive flows to the company as liquid assets.
The two-stage grant includes a first step with the application of an R&D certificate. In the first year of existence of this programme, we have successfully received almost 95% of positive R&D certificates for our more than 30 clients, applying for 63 projects and a total project volume of over € 50 million.
In the second step the monetary grant award has to be confirmed by the tax authorities.
We are pleased to announce that the first tax certificate for one of our clients in the health sector has been awarded recently, covering the full amount that was applied for!
Further confirmations are expected soon, as several applications have been submitted in the last weeks!