The Forschungszulage and ZIM both fund R&D. But they do it in fundamentally different ways. The Forschungszulage is a tax entitlement with no deadline and no committee. ZIM is a competitive grant with a budget proviso and a substantive assessment of applications. Anyone who knows both chooses deliberately, or combines them where the law allows.
The core difference at a glance
The Forschungszulage isn't funding in the classic sense. It is a tax allowance under the Research Allowance Act (FZulG), credited against income or corporation tax and, for loss-making companies, paid out as a refund because the excess is disbursed under § 10 FZulG[1]. There is no budget that can run out. There is no committee that decides. There is no deadline. Anyone who meets the criteria has a legal entitlement.
ZIM works differently. It is a competitive grant from the Federal Ministry for Economic Affairs and Energy, administered through project management agencies. Applications are assessed substantively and money is granted within the budget. The programme has several hundred million euros a year[3], but once the budget is exhausted no new approvals are issued, and that happened temporarily in 2024/2025. The Forschungszulage carries no such risk.
Amount and calculation
The Forschungszulage is calculated as a percentage of a financial year's eligible expenditure. Since 2026 the assessment base has been up to €12m a year per group of companies. The rate is 25% as standard and 35% for SMEs under GBER Annex I on application. For SMEs that gives a maximum allowance of €4.2m a year[2][1]. From 2026 a flat overhead recognition of 20% of the remaining eligible expenditure, with no itemised evidence, is added[4].
ZIM applies different measures. Single projects are capped at eligible costs of up to €690,000; for cooperation projects the ceiling per company is €560,000, with a total of €3m per cooperation project. The rates differ by company size and location: 25% to 45% for single projects, with uplifts for cooperation and structurally weak regions[3].
In figures: an SME with €1.5m of R&D staff expenditure a year receives around €630,000 from the Forschungszulage (35%, including the 20% overhead flat rate), with no committee and no project assessment. From ZIM as a single project, the same company at a 35% rate would receive a maximum of €241,500, because eligible costs are capped at €690,000. For significant R&D budgets, the Forschungszulage is the higher-volume instrument.
Who gets in?
The Forschungszulage is open to all businesses taxable in Germany, regardless of legal form, sector and size. From sole traders to group companies, provided the project meets the Frascati criteria: novelty, technical and scientific uncertainty, systematic method[1]. Company size doesn't decide access, only the funding rate.
ZIM, by contrast, is aimed specifically at mid-sized companies: businesses with up to 1,000 employees and cooperating research institutions. Large companies therefore can't access ZIM. For startups and small companies it is a valid instrument, particularly where a cooperation partner (a university, a Fraunhofer institute, another company) is to be involved. In ZIM, research institutions are funded at 100% of their non-economic costs[3]; the FZulG has no equivalent.
Application process and timeline
The Forschungszulage has two stages. First you apply to the Bescheinigungsstelle Forschungszulage (BSFZ) for a certificate on the R&D quality of the project, with a typical processing time of 2–4 months. Then you apply to the tax office for assessment. The tax office assesses the assessment base and the costs independently. In practice 12–18 months pass between the end of the financial year and payment[1]. No deadline, no competition, no external reviewer.
ZIM likewise has no fixed deadline; applications are possible all year. But the process is different: you submit a complete project application that is assessed on the substance. Processing takes several months depending on the agencies' workload. Only after approval may you start the project; a project already begun isn't eligible. With the Forschungszulage you can submit ongoing projects at any time, and retroactively for up to four past financial years under § 169 AO[5].
Another difference: ZIM requires a detailed work plan, milestones and cost calculation up front. The BSFZ certificate assesses whether the project qualifies on the merits; not cost items, and not the level of work plan detail ZIM demands. The substantive hurdle is similar (the Frascati criteria versus ZIM eligibility), but the documentation effort before the project starts is higher with ZIM.
Combining them, and where that ends
The Forschungszulage and ZIM can both be used by the same company, but not for the same costs. § 7 FZulG expressly rules out double funding: expenditure already funded by a state grant may not additionally feed into the Forschungszulage assessment base[1]. Staff hours recorded as eligible costs in a ZIM application drop out of the FZulG assessment base.
The solution is a clean separation of cost centres. A company with two parallel R&D teams can fund team A through ZIM and team B through the Forschungszulage, provided the allocation of hours and costs is robustly maintained at the level of individual employees and projects. Overheads claimed as a flat rate (20% from 2026) may only relate to the FZulG-eligible expenditure, not to the ZIM elements. Mixing them in the accounts leads to clawback at the latest in a tax audit.
When does which fit?
The Forschungszulage is the right instrument when:
- you carry out R&D continuously and need a reliable funding volume,
- your R&D budget exceeds the ZIM cost cap of €690,000 and you want to use the full potential,
- you don't want a committee, deadline risk or a budget proviso,
- you want to claim funding retroactively for projects already running or completed.
ZIM is the right instrument when:
- you want to bring a research institution in as a cooperation partner — the FZulG funds contract research at only 60–70% of the fee, while ZIM finances research institutions at 100%,
- your single project is clearly defined and the budget sits within the ZIM cap,
- you are a young company with no significant tax liability — although in that case the Forschungszulage is also paid out where it exceeds the tax liability,
- you want to finance a feasibility study before the actual R&D project: ZIM funds that step as a format of its own, the Forschungszulage doesn't.
For many mid-sized and growth companies with continuous R&D, the answer isn't either-or. The Forschungszulage covers the breadth of R&D staff costs; ZIM finances cooperation projects with research partners on top, as long as the cost centres are cleanly separated.
FAQ
What is the main difference between the Forschungszulage and ZIM? The Forschungszulage is a tax incentive you are entitled to: meet the criteria and you get it. ZIM is a competitive grant with a budget proviso: applications are assessed on the substance and money is granted while the budget lasts. The Forschungszulage has no deadline, no committee and no quota.
Can you apply for the Forschungszulage and ZIM at the same time? Yes, but not on the same costs. The ban on cumulation under § 7 FZulG prohibits double funding: staff hours funded by a ZIM grant may not additionally feed into the Forschungszulage assessment base. The separation has to be maintained cleanly at the level of individual cost types and hours[1].
What is the maximum I can get from the Forschungszulage in 2026? Up to €4.2m a year for SMEs (a 35% rate on a €12m assessment base). Standard is €3.0m a year (25%). From 2026 a 20% overhead flat rate on eligible expenditure is added[2].
What does ZIM fund that the Forschungszulage doesn't? ZIM finances research institutions as cooperation partners at 100% of their non-economic costs. It also covers cooperation projects — between companies, or between companies and research institutions — with a total volume of up to €3m, plus feasibility studies as a format of their own[3].
For which company is ZIM better than the Forschungszulage? For companies wanting to bring in a specific research partner and deliver a clearly defined single project with a limited budget. Also for companies wanting to finance their whole R&D cooperation structure — university, institute, partner company — from one pot without having to manage the delimitation against the Forschungszulage.
Forschungszulage 2026: the complete guide
A €12m assessment base, a 35% SME rate, a two-stage procedure: an overview of the Forschungszulage in 2026, and where to find the detail.
Forschungszulage 2026: a €12m assessment base, €4.2m for SMEs — what applicants need to know now
The immediate tax investment programme raises the cap again. Which documentation mistakes are surfacing in the first BSFZ wave, and how to be ready for them.
Forschungszulage: which staff costs are eligible
Which pay components feed into the assessment base, how the 20% overhead flat rate works from 2026, and why time records decide the payout.
The BSFZ certificate: process, criteria and processing time
No Forschungszulage without a BSFZ certificate. What the certification body assesses, how the application works, and why many descriptions start from the wrong point.
All the detail, eligibility and pitfalls:
- [1]Research Allowance Act (FZulG) — consolidated version— Federal Ministry of Justice · gesetze-im-internet.de, 2026 Source
- [2]Act on an immediate tax investment programme to strengthen Germany as a business location (BGBl. I no. 161, 18 July 2025)— Bundesgesetzblatt, 2025 Source
- [3]Guideline "Zentrales Innovationsprogramm Mittelstand (ZIM) — R&D funding", Bundesanzeiger AT 11.12.2024 B1— Bundesanzeiger Verlag / BMWK, 2024 Source
- [4]The immediate tax investment programme and its effect on the Forschungszulage— Bescheinigungsstelle Forschungszulage (BSFZ), 2026 Source
- [5]Fiscal Code § 169 — limitation of assessment— Federal Ministry of Justice · gesetze-im-internet.de, 2024 Source
- [6]Regulation (EU) No 651/2014 (General Block Exemption Regulation, GBER), Article 25 — aid for R&D projects— European Commission, EUR-Lex, 2014 Source