The Forschungszulage is assessed in two stages: the BSFZ certifies that the project qualifies on the merits, and the tax office then assesses the level of staff costs. It is at that second stage that many applications fail, not because the project wouldn't qualify but because the time records are missing or were put together after the fact.
Why time records are decisive
The tax office only accepts as eligible staff costs the working hours demonstrably attributable to a certified R&D project. A blanket ratio — "80 per cent R&D" — with no written basis doesn't hold up in an audit.
For most companies, staff costs form the largest part of the assessment base. Anyone unable to produce robust documentation loses the most valuable item in the application. The tax office is not bound by the BSFZ certificate here: the BSFZ certifies that a project qualifies; the tax office independently assesses how many hours are actually evidenced.
What the tax office actually requires
The Ministry of Finance's application decree on the FZulG and the BSFZ FAQ make clear the minimum requirements for a time record:
- Employee link: every recorded hour has to be attributed to a specific employee.
- Project link: every hour has to be attributed to a specific R&D project certified by the BSFZ, not just to a department or a cost centre code.
- Period link: the record has to show the period (date, or at least calendar week) in which the work took place.
- Contemporaneity: reconstruction after the fact is challenged. Records should be created daily or weekly, not retrospectively.
A cost centre report from the accounts showing only project codes generally doesn't meet these requirements. The R&D share has to be traceable at the level of individual people.
Which formats are accepted
The FZulG prescribes no particular format. What matters is that the evidence was created contemporaneously and stands up to an audit trail. The following systems are used in practice:
- Project time tracking tools such as Harvest, Toggl, Clockodo or comparable SaaS solutions with an export function
- Ticket systems (Jira, Linear, GitHub Issues) with time tracking integration, provided projects are cleanly marked as R&D
- ERP or HR systems (SAP, Personio, Datev) where they record project time at project level
- Simple timesheets in Excel or a spreadsheet: these work if they are filled in weekly, versioned and not altered afterwards
Separation matters: for every financial year and every project the tax office needs a separate report. Anyone running several R&D projects in parallel has to show hours per employee and per project, not as a total.
Special case: own work by shareholders
For actively involved sole traders and shareholders with no payslip, § 3 (3) FZulG provides for notional own work. For R&D hours worked up to 31 December 2025 a rate of €70 an hour applies (raised by the Growth Opportunities Act with effect from 28 March 2024); for hours from 1 January 2026 the rate was raised to €100 by the 2025 immediate tax investment programme. The claim is limited to 40 hours a week.
Here too, an hour-by-hour record per project is mandatory. The tax office doesn't accept a blanket statement that "the shareholder spent 50 per cent of their time on R&D" with no evidence. Suitable sources are calendar entries, commit histories, meeting minutes or a written work diary.
Reconstructing retrospectively: what works and what doesn't
Anyone who kept no time records in past financial years and wants to claim the Forschungszulage retroactively faces a high evidential hurdle. The Ministry of Finance's application decree does accept reconstruction after the fact in principle, but requires a robust derivation, not a mere estimate.
The following data sources can support a reconstruction:
- Git commit history with authors and timestamps
- Ticket exports from Jira, Linear or GitHub with project attribution
- Calendar entries (Google Calendar, Outlook) evidencing meetings and sprints
- Slack or Teams archives with channel-based project attribution
- Internal documentation (wikis, Confluence) with version history
- Pull request reviews and code review data
The more independent sources that agree, the more robust the reconstruction. A single source, such as the Git history alone, is often not enough if it is disputed. Pure hour estimates without digital artefacts are regularly challenged by the tax office.
For current financial years the rule is: better to introduce a simple system today than to reconstruct in two years. Even a weekly Excel sheet, filled in promptly and saved, beats no system at all.
What a tax audit examines
The Forschungszulage feeds into the tax assessment and is subject to tax audit. An audit often starts several years after the assessment and then requires the documentation to be still complete and comprehensible. The retention obligation runs for the whole tax assessment period.
Three points are the focus of an audit:
- Time records: do the R&D hours claimed match the evidence? Were hours documented contemporaneously and per employee?
- The R&D versus routine boundary: are the recorded activities genuinely attributable to the certified project, or do R&D hours mix with product maintenance, customer projects or operations?
- The ban on cumulation: were hours already funded through ZIM, EXIST or other programmes correctly stripped out of the assessment base? The same person-hour is funded only once.
A stable documentation system that closes the chain from the BSFZ certificate through the project description, time records and payroll to, in the case of contract research, contract and invoice records, is the best preparation for an audit.
FAQ
Do I need time records for the Forschungszulage? Yes. During assessment the tax office checks whether the staff costs claimed can be demonstrably attributed to a certified R&D project. Without time records, or an equivalent activity evidence system, the staff costs are not recognised.
How detailed does a time record for the Forschungszulage have to be? The record has to document at least the employee, the R&D project and the hours per period (typically daily or weekly). A general project record at cost centre level isn't enough; the granularity has to show the R&D share per person robustly.
Which tools can I use for time recording? Any system that attributes hours to an employee and a project and produces an audit trail. Jira, Harvest, Personio, Toggl, Excel with version control or an in-house project time system are all common. What matters isn't the tool but that the evidence was created contemporaneously, not afterwards.
What applies to shareholder-managing directors with no payslip? For actively involved shareholders and sole traders, § 3 (3) FZulG provides for notional own work: €70 an hour up to 31 December 2025 and €100 an hour from 1 January 2026 (the 2025 immediate tax investment programme), capped at 40 hours a week. Here too an hour-by-hour record per project is mandatory.
Can I reconstruct missing time records afterwards? The Ministry of Finance's application decree accepts reconstruction in principle where it is robustly derived, not merely plausibly estimated. Git histories, calendar entries, ticket exports or meeting minutes can serve as a basis. A pure estimate with no evidence isn't enough in an audit.
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: 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 Forschungszulage in a tax audit: what the tax office checks
The audit often starts years after the BSFZ decision. Anyone without robust time records by then risks clawback.
Forschungszulage retroactively: four years of cash flow almost nobody claims
§ 169 AO allows closed financial years to be reopened. What the typical bootstrapped founder overlooks.
All the detail, eligibility and pitfalls:
- [1]Act on tax incentives for research and development (FZulG)— Federal Ministry of Justice · gesetze-im-internet.de, 2026 Source
- [2]§ 3 FZulG — eligible expenditure and the assessment base— gesetze-im-internet.de (BMJ), 2026 Source
- [3]Ministry of Finance circular of 7 February 2023 on granting the Forschungszulage (AEFZulG)— Federal Ministry of Finance, 2023 Source
- [4]FAQ — assessment criteria and application procedure for the Forschungszulage— Bescheinigungsstelle Forschungszulage (BSFZ), 2026 Source
- [5]The immediate tax investment programme and its effect on the Forschungszulage— Bescheinigungsstelle Forschungszulage (BSFZ), 2026 Source