Tax Support for Innovation and Growth
Targeted tax incentives stimulate innovation and accelerate investments by companies in Germany.
Oct 22, 2026
Germany's Research Allowance Act
Companies subject to taxation in Germany and engaged in R&D activities are eligible for a tax credit of up to EUR 3 million per year (up to EUR 4.2 million for SMEs); 25 percent of eligible costs (35 percent for SMEs). Eligible expenditures include project-related personnel costs and depreciation of assets used in the R&D process, with annual eligible costs capped at EUR 12 million.
To benefit from the research allowance, companies must obtain a certificate from the official R&D certifying body confirming the project’s eligibility. Following confirmation of project eligibility, the incentive is administered through the tax system. If no tax liability exists, the benefit is paid out directly as a cash refund, ensuring that both established companies and growth-oriented innovators can benefit from the scheme.
Immediate Tax Investment Program
Germany’s InvestBooster, adopted in July 2025, is an initiative of the federal government that aims to attract corporate investment and drive growth through fiscal incentives.
For investments made between July 1, 2025, and December 31, 2027, a declining-balance depreciation of up to 30% applies. This is complemented by a gradual reduction in corporate income tax rates starting in 2028.
The federal government's goal is to enable faster refinancing of investments and to enhance Germany’s international competitiveness as a business location.