The BSFZ certificate is the first of two mandatory steps towards the Forschungszulage. Without it the tax office cannot assess the allowance. The Bescheinigungsstelle Forschungszulage (BSFZ) decides solely on whether a project qualifies on the merits, not on the level of costs.
What is the BSFZ certificate?
The BSFZ certificate is a basic assessment notice under § 171 (10) of the Fiscal Code. It establishes that a project meets the requirements of §§ 2 and 3 FZulG, meaning it constitutes qualifying research and development within the meaning of the Act. That notice binds the tax office: once the BSFZ has confirmed eligibility, the tax office may not deny it on its own account.
The BSFZ sits within the DLR project management agency and runs its own online portal at bescheinigung-forschungszulage.de. The application is free and can be made for ongoing as well as completed projects, provided the tax assessment period has not expired.
The process step by step
The procedure has four phases.
- Application in the BSFZ portal: the company describes the R&D project online. Required: the research question, the state of the art, the intended findings, the methodological approach and a project plan with milestones. Supporting documents, contracts or cost breakdowns are not submitted at this stage.
- Assessment by the BSFZ: the BSFZ's experts assess the project against the Frascati criteria. Where anything is unclear, the BSFZ raises queries.
- Decision: if the assessment is positive, the BSFZ issues the certificate confirming the R&D quality of the project, per financial year. If it is refused, an objection can be lodged.
- Application to the tax office: with the certificate as a basic assessment notice, the company applies to its tax office for assessment of the Forschungszulage and evidences the eligible expenditure.
Assessment criteria: what the BSFZ looks at
The BSFZ's assessment guide (as at October 2025) names three overarching criteria derived from the OECD Frascati Manual:
- Novelty: the project aims at findings that go beyond the current state of the art. Routine adaptations and known solution paths drop out.
- Technical and scientific uncertainty: the outcome cannot be predicted with certainty at the start of the project. Whether the intended goal is achievable at all, and by which route, has to be open.
- Systematic method: the project follows a planned methodological approach with defined work packages and milestones. Not trial and error with no knowledge objective.
The BSFZ assesses only this substantive side. The level of expenditure claimed, time records and payroll accounts are not part of the certification procedure; the tax office assesses those separately at the second step.
Processing time
There is no statutory processing deadline for the BSFZ. In practice, typically 2 to 4 months pass between submission and decision. For complex projects with technical queries, or when application volumes are high, that period can lengthen.
Anyone catching up on several past financial years can apply for all of them in parallel. The BSFZ then assesses a substantively connected project consistently across the years applied for, avoiding contradictory decisions.
Common grounds for refusal
The most common failure pattern is a project description that describes the market benefit instead of the technical challenge. Anyone who writes about what the product should achieve in the market misses at least the novelty and uncertainty criteria, however innovative the result may be. The BSFZ expects a description of the open research question and the remaining technical risks.
- A product description instead of a research question: the state of the art isn't delimited; the description lists features, not knowledge objectives.
- No recognisable uncertainty: the project describes an implementation using known methods, and from an engineering point of view the outcome isn't open.
- No systematic method: no work plan, no milestones, no methodological approach. The project reads like ongoing product maintenance.
- The project is defined too broadly: standing themes like "digitalising production" or "continuous product improvement" are not delimitable projects within the meaning of the FZulG.
After the certificate: the tax office
The BSFZ certificate is a necessary but not sufficient condition for the Forschungszulage to be paid. At the second step the tax office assesses the assessment base: staff costs, own work by shareholders, contract research and, since 2026, the flat overhead recognition of 20 per cent of other eligible expenditure.
The tax office requires complete, contemporaneous time records that clearly attribute the working hours claimed to the certified project. Experience suggests that anyone reconstructing after the year end rarely discharges that burden of proof in full. Time records therefore have to be kept in-year and per project, regardless of when the BSFZ application is made.
Under § 10 FZulG the Forschungszulage is credited against assessed income or corporation tax. If it exceeds the tax liability, the excess is paid out as a tax refund. For loss-making companies it therefore works in effect like a cash payment. In practice, typically 12 to 18 months pass between the end of the financial year and the tax office's assessment.
FAQ
How long does the BSFZ certificate take? The BSFZ typically processes applications in 2 to 4 months. There is no statutory deadline. For complex projects or where queries arise, the period is longer.
What exactly does the BSFZ assess? The BSFZ assesses only whether the project qualifies on the merits, against three criteria: novelty, technical and scientific uncertainty, and systematic planning. It does not assess costs or expenditure; that is the tax office's job at the second step.
What happens after the BSFZ certificate? With the certificate as a basic assessment notice, the company applies to its tax office for assessment of the Forschungszulage. The tax office assesses the level of eligible expenditure and credits the allowance against corporation or income tax.
Can an ongoing project be applied for? Yes. The BSFZ application can be made while the project is still running. Retroactive certification for completed projects is possible, provided the tax assessment period under § 169 AO has not expired.
What is the most common reason the BSFZ refuses? The most common ground is a project description that puts the market benefit ahead of the technical challenge. The BSFZ expects a description of the research question, the state of the art and the remaining uncertainty, not a product description.
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All the detail, eligibility and pitfalls:
- [1]Research Allowance Act (FZulG) — consolidated version— Federal Ministry of Justice · gesetze-im-internet.de, 2026 Source
- [2]Assessment guide of the Bescheinigungsstelle Forschungszulage (as at October 2025)— Bescheinigungsstelle Forschungszulage (BSFZ), 2025 Source
- [3]FAQ — assessment criteria and application procedure for the Forschungszulage— BSFZ, 2026 Source
- [4]Ministry of Finance circular of 7 February 2023 on granting the Forschungszulage under the FZulG— Federal Ministry of Finance, 2023 Source
- [5]Fiscal Code § 169 — limitation of assessment— Federal Ministry of Justice · gesetze-im-internet.de, 2024 Source
- [6]Frascati Manual 2015 — Guidelines for Collecting and Reporting Data on Research and Experimental Development— OECD, 2015 Source