Is process and formulation development eligible?

Yes, if the technical outcome was open before the trial. Field trials, process development and formulation work are experimental development under Section 2 FZulG — variety swaps and flavour variants to a known recipe are not.

Agriculture & FoodTech R&D Tax Credit 2026

In agriculture and FoodTech the open technical question decides, not the size of the operation.

The certification office does not assess how elaborate a plant or field trial was, but whether a technical question was open beforehand and answered systematically. A food producer rarely loses an application on the technology; usually it is lost because recipe maintenance and process development sit in the same project.

Rates, costs and limits

The essentials on the research allowance in agriculture and FoodTech

Funding rate: 25% of the assessment basis, 35% for SMEs. For projects started after 31 December 2025, a 20% flat rate increases the assessment basis (Section 3 (3b) FZulG); the EUR 12 million cap still applies (Section 3 (5) FZulG).
Eligible: Novel processes, formulations, cultivation systems and testing methods. What counts is not the crop or the product but whether novelty, technical risk and systematic approach can be demonstrated.
What counts: The employer gross salary of process engineers, food technologists, agronomists and data scientists for the hours spent on the project. Since 2024 also the depreciation of movable assets used exclusively for the project, such as a pilot line. Test material and raw materials for the trial itself are not eligible.
Ceiling: Assessment base of EUR 12 million per financial year, maximum research allowance EUR 4.2 million.
Contract research: 70% of the cost of commissioned development work is eligible (Section 3 (4) FZulG): food research institutes, universities, agricultural research stations and external testing labs.
Retroactive: Applications for closed financial years from 2022 are possible as long as the assessment period of the respective year is still open; for 2020 and 2021 it has expired (§ 12 FZulG in conjunction with § 169 AO). Projects started before 1 January 2026 do not receive the overhead allowance.

Which activities in agriculture and FoodTech are eligible?

The industry does not decide eligibility. The certification office checks every project against three criteria: novelty, technical risk, systematic approach. If one fails, the application fails. Below are the activities we encounter most often at agriculture and food companies, with the verdict we expect.

Boundary case: eligibility depends on the specific project.

Process engineering & technology

Novel process concept with unknown structure or stability behaviourEligible
Eligible. Novelty: No process available on the market achieves the required texture or process stability at your raw material or plant specification. Technical risk: Whether texture value, water activity or process stability land in the target range is not known before the measurement series and pilot run. Systematic approach: Design, pilot trial, measurement, iteration, documented by test plans and trial protocols.
Scaling a proven process to a new plant size or raw material batchBorderline
Borderline. Routine as long as the process parameters transfer. It becomes eligible when heat transfer, residence time or shear stress demonstrably no longer scale linearly at the new size and have to be re-derived. The evidence is the measurement series showing where the old parameters fail.
Process optimisation on an existing line for a target value outside the previous windowBorderline
Borderline. Eligible is the part for which no validated parameter set exists and which is resolved in testing. Not eligible is fine-tuning known parameters within the catalogue, even if it takes weeks.
Retrofitting a line to manufacturer specification, run-in to checklistNot eligible
Not eligible. The way is documented, the result predictable. Effort is not a criterion of the FZulG.

Formulation & texture

New formulation with an open interaction between ingredients whose texture or stability behaviour cannot be determined in advanceEligible
Eligible. Anyone who designs a formulation because standard formulations do not achieve texture, binding or stability must explain why. That names the state of the art. Keep the rejected formulation variants and their measurements; that is the decisive evidence later.
Fermentation process with a new strain or substrate, open yield and metabolic questionEligible
Eligible. Whether a microorganism reaches the targeted yield or functionality under the chosen process conditions is open beforehand. Measurement series on yield, pH curve and metabolites over iterations are systematic approach and technical risk in one.
Formulation adaptation to a new raw material with unclear processing behaviourBorderline
Borderline. Eligible if the processing behaviour of the new raw material is unresolved and worked out in testing. Routine if a supplier data sheet prescribes the parameters.
Recipe variation and range maintenance within the known process windowNot eligible
Not eligible. New flavour, adjusted portion size, seasonal variant: the result is known before the start, the procedure documented.

Shelf life & safety

New preservation process with open effect on shelf life and microbiologyEligible
Eligible. Whether high-pressure processing, pulsed electric fields or a new hurdle concept achieve the required microbial reduction at acceptable product quality cannot be determined before the trial series. The series across parameters, storage time and sensory testing is your evidence of systematic approach.
Developing a rapid detection method for contaminants with an open detection limitEligible
Eligible. Response time, detection limit and susceptibility to interference conflict and are measurable. That makes the technical risk quantifiable, the strongest starting position an application can have.
Shelf-life study for a known process on a new productBorderline
Borderline. Eligible as soon as a target value is required that the known process demonstrably fails to reach, and the cause is unclear beforehand. Without that measurement the certification office reads only a demanding requirement, and demanding is not a criterion of the FZulG.
Routine batch release and standard testing to specificationNot eligible
Not eligible. Even elaborate testing remains quality control. The way is documented, the result predictable.

Farm technology & sensors

New sensor system or forecasting model with open accuracy under field conditionsEligible
Eligible. Whether a model built from soil, weather and satellite data predicts yield or pest pressure with sufficient accuracy is open beforehand. Comparing model and harvest outcome across several growing seasons is the evidence.
Connecting existing sensors to new analysis software with unclear signal qualityBorderline
Borderline. Eligible if it is documented that the available signals do not support the required statement and own methods for conditioning had to be developed. Pure wiring, protocol mapping and dashboards are integration.
Introducing standard farm management software, dashboards or interfacesNot eligible
Not eligible. Even demanding integration work remains integration. The tools are built for exactly this purpose, the way is documented, the result predictable.

Breeding & cultivation methods

Plant breeding with marker-assisted selection or a novel crossing strategyEligible
Eligible. Whether the targeted trait combination is achievable with the chosen method and within the intended time is not settled beforehand. Crossing protocols, selection data and rejected lines document systematic approach and technical risk.
Field trial with a test plan for a new cultivation method (crop rotation, irrigation, fertilisation strategy)Borderline
Borderline. Eligible if a test plan with control plots, measured variables and abort criteria is defined in advance and primary agricultural production itself stays out of it. Without a test plan it is cultivation, not a trial.
Ongoing cultivation, variety maintenance, propagation of known varietiesNot eligible
Not eligible. Primary agricultural production itself is not R&D, regardless of effort or weather risk.

What is regularly rejected

Ongoing agricultural production and harvestNot eligible
Not eligible. Primary production is not experimental development within the meaning of the FZulG, even though weather and pests make the outcome uncertain. Only a planned trial run alongside it remains eligible.
The approval procedure itself: dossier preparation, regulatory communicationNot eligible
Not eligible. The upstream R&D phase, such as formulation development and safety testing, is eligible. The pure approval work afterwards is not.
Quality control and batch release in routine operationNot eligible
Not eligible. Mandatory work under food law whose result is settled. The test protocols created along the way can, however, serve as evidence for an eligible project.
Recipe and range maintenance without an open technical questionNot eligible
Not eligible. The result is fixed beforehand: the same functional scope in a new form. Occasionally submitted by advisers along with everything else, and then it drags the whole project into scrutiny.

Your project is not listed or sits between two lines? That is the normal case; eligibility is decided on the specific facts, not on the heading. Describe the project to us and we will tell you where it stands.

What evidence does the BSFZ expect in agriculture and FoodTech?

Agriculture and FoodTech companies practically never introduce an additional system for the research allowance; they have the evidence already. We evaluate what exists and assign each source to the criterion it supports.

What evidence does the BSFZ expect in agriculture and FoodTech?
Source	What it proves	Criterion
Formulation and process revisions	Formulation revisions show attempt, rejection and new approach, the strongest evidence of experimental development a product development team can deliver.	Systematic approach · Technical risk
Test plans and pilot line protocols	Aborted runs and measurement series date what was tried when and what it was measured against. A failed run is no blemish; it is proof of an open outcome.	Systematic approach · Technical risk
Laboratory analysis: texture, water activity, microbiology	Measurement series with boundary conditions and repeats show that the target value was not trivially achievable.	Technical risk
Sensory panels · descriptive and instrumental testing	Trained panels and instrumental measurement together document whether a formulation or process change actually makes a perceptible difference, not just a number on paper.	Systematic approach
Field trial data with a test plan	Control plots, repeats and documented confounders such as weather show that a cultivation method was tested systematically, not just farmed differently for one season.	Novelty · Technical risk
Batch protocols before and after a process change	Measurements before and after the intervention document the difference between running in to instructions and working out previously unknown behaviour.	Scope
Time recording · project hours	For the tax office application the hour counts. We map an existing time recording onto the projects instead of introducing a parallel system.	Cost side
Change protocols · formulation history	Change histories name the rejected variants, exactly the information with which the state of the art can be demonstrated.	Novelty

The most common mistake in assisted applications is a development process constructed after the fact with phases that never existed at your company. Your real test protocols and batch data are the better evidence; they provide a complete, dated record of the procedure.

What comes out of it?

Two calculated cases for projects that started after 31 December 2025, once at the SME rate of 35%, once at the standard rate of 25%.

FoodTech company, 40 employees · SME

Employer gross, 8 food technologists and process engineers: EUR 720,000. Eight food technologists and process engineers, R&D share documented via project hours, plus a testing contract placed with a food research institute

R&D personnel costs (employer gross)EUR 360,000

Contract research, 70 % of EUR 40,000+ EUR 28,000

Overhead flat rate 20 %+ EUR 77,600

Eligible expensesEUR 465,600

Funding rate35 %

Research allowance per yearEUR 162,960

Per year. Applied for retroactively over three open financial years: around EUR 0.45 million, without the overhead allowance, because the project started before 2026.

Food group, 400 employees

Employer gross, 25 developers: EUR 2,000,000. Twenty-five developers working on new extrusion technology for plant proteins, not an SME. Standard rate 25%, contract research with a food research institute

R&D personnel costs (employer gross)EUR 1,200,000

Contract research, 70 % of EUR 100,000+ EUR 70,000

Overhead flat rate 20 %+ EUR 254,000

Eligible expensesEUR 1,524,000

Funding rate25 %

Research allowance per yearEUR 381,000

Per year. The assessment base is capped at EUR 12 million, a maximum of EUR 3.0 million allowance at the standard rate, EUR 4.2 million as an SME.

As a rule of thumb: a food technologist with an employer gross of EUR 70,000 who spends half of the time on eligible projects yields around EUR 14,700 research allowance per year (SME rate, with the overhead allowance — the project starts after 31 December 2025). The whole is capped at an assessment base of EUR 12 million and an allowance of EUR 4.2 million per year. Go to the calculator

Guide: R&D tax credit for agriculture and FoodTech companies
The eligibility rules, the sources of evidence and a template for the project description, as a PDF.

What agriculture and FoodTech companies ask us most often

Is plant breeding and variety development eligible under FZulG?+

Yes, plant breeding that goes beyond classical selection and uses new technologies such as marker-assisted selection or novel crossing strategies qualifies as experimental development. What matters is technical novelty and an open outcome; mere propagation of known varieties does not. NOVARIS clearly delineates the R&D share.

Can Novel Food approval procedures be claimed as R&D?+

The upstream R&D phase, such as formulation development, process optimisation and safety testing, is eligible, while pure approval activities such as dossier preparation and regulatory communication do not qualify as R&D. NOVARIS identifies the eligible share within your approval preparation.

Is digital agriculture and agri-software independently eligible?+

Yes, fully. Algorithms for yield or pest forecasting, AI-based irrigation control, remote sensing analysis or autonomous field robot software are eligible under FZulG, even without a physical harvest or production component. The same criteria apply as for pure software development: technical novelty and systematic approach.

Is ongoing agricultural production or a field trial eligible?+

No, primary agricultural production itself, meaning cultivation and harvest in regular operation, is not experimental development within the meaning of the FZulG. Eligible is a trial run alongside it, if a test plan with control plots, measured variables and abort criteria is defined in advance. Without a test plan it is cultivation, not a trial.

Is formulation development always eligible?+

No. Recipe variation and range maintenance within the known process window are routine. A formulation becomes eligible only once its texture, stability or shelf-life behaviour could not be determined in advance and was resolved in a trial series.

Can farmers claim their own working hours as sole proprietors?+

Farmers who run their operation as a sole proprietorship or as a co-entrepreneur of a partnership can claim their own time spent on the project at EUR 100 per hour (Section 3 (3) FZulG), capped at 2,080 hours per year. This does not apply to a GmbH: the shareholder-managing director does not count among the persons entitled under Section 3 (3) FZulG.

Is contract research with universities and food research institutes eligible?+

Yes, 70% of the cost of commissioned development work is eligible (Section 3 (4) FZulG), for example with food research institutes, agricultural research stations, universities or external testing labs. The precondition is that your company itself acts as the client and uses the result for its own project.

How far back can agriculture and FoodTech companies apply?+

Applications for closed financial years from 2022 are possible; the assessment period of the respective year is decisive. For many agriculture and FoodTech companies a substantial amount sits precisely in these earlier years, because process development was never recognised as R&D. Retroactive application

How does your documentation become an application?

Your pilot line and your test field already document everything the certification office wants to see, just in a different language. Here is the same set of facts in four registers, from the measurement protocol to the application sentence.

In the test field — What gets written anyway

Extrusion line EX-210, series 2
Texture value varies ±11% over 6 h
  // target ±5%, zone separation not enough

- zone sensors ....... 3 pcs
- control model ...... v2
- series 3 ........... 4% / 8 h ok

In conversation — What the team says about it

"After the die the fibre structure breaks up unevenly. The separated zones did not do it, so we fitted the probe and compensated the screw speed against it, and on the third run we were below five percent variation."

Technically complete and worthless as application text. There is no reference to the state of the art or to the measured variable.

At the BSFZ — What is actually examined

Novelty
Technical risk
Systematic approach

For each of the three criteria the application must contain a verifiable statement. What is described is the knowledge gained on the way to the finished line.

In the application — What we formulate from it

"For the combination of a multi-zone regulated cooling die and inline texture measurement in the high-moisture extrusion of plant proteins, no plant concept existed whose texture value had been demonstrated within the required variation of ±5% over a full production shift. Whether screw speed and zone temperature can be controlled so that the texture stays stable could not be determined in advance. The project established this in three measurement series against a defined target."

This is the work. The same facts, four formulations, and only one of them is an application. This translation is our actual service: building, from what your test field produces anyway, the statement the certification office can examine. Not writing more beautifully. Writing differently.

Why do applications fail in agriculture and FoodTech?

Rejected projects from agriculture and FoodTech rarely fail on their technology. They fail on five recurring patterns, and we see them in self-submitted applications just as in externally assisted ones.

The state of the art is missing

The application describes what was produced, not why it could not be done with what was available. Without named competing processes, standards or market-standard formulations the certification office cannot establish novelty. This is the most common reason in our own mandates.

How we do it. We specifically name the processes, formulations and cultivation methods that were examined and rejected, each with the technical property on which they fail.

Ongoing production is submitted as the project

A field trial on your own operation is not excluded per se, but an application covering "the harvest" or "the season" forces the certification office to assess primary production and trial together. The routine shares drag the whole project down.

How we do it. We scope the project to the part for which a test plan with control plots existed and cleanly separate ongoing cultivation and harvest.

Project risk instead of technical risk

Weather, harvest timing and raw material prices are not technical risks. Anyone arguing this way describes a business risk and gets it decided as such.

How we do it. We phrase the risk as an open technical question: which property of the process or formulation was not predictable before the start, and exactly where the project would have failed.

The formulation outcome is described as a product

The application reads like a product data sheet: taste, shelf life, nutritional value. The certification office is looking for the way there, the trials that did not work and the measurement that proves the difference.

How we do it. We derive the systematic approach from your own artefacts: design in the test plan, trial in the test protocol, decision in the change protocol.

Cost side and facts do not match

The BSFZ certifies the project, the tax office checks the costs. Anyone who claims raw material and test material costs, or hours that contradict the project description, loses in the second step, after the certificate has already been issued.

How we do it. We run project description, time recording and research allowance application (ELSTER) against the same scope from the start. The cost side is not created afterwards.

If you already have a rejection, the first step is analysing the decision: which of the five points carries it. That determines whether objection or new application is the right way.

Which other industries use the research allowance?

The sector never decides eligibility — Section 2 FZulG does. These pages show the same three criteria against the activities of each field.

Mechanical engineering — Design, testing, commissioning
Automotive — Drivetrain, battery, driving function
Medical technology — Operating principle, SaMD, pre-approval
Pharma & life sciences — Compound, formulation, bioprocess
Construction — Methods, materials, component tests
Energy & cleantech — Cell, storage, grid control
Aerospace — Structure, propulsion, avionics
Software & IT — Algorithm, model, architecture

Send us a trial protocol, not a questionnaire

In the first consultation we talk about your process or your field trial, not about your legal form. After thirty minutes you know which part of your development is eligible, in what order of magnitude, and whether a retroactive application is worthwhile. The first consultation is free; 30 % of the fee falls due with the BSFZ decision, 70 % only after the allowance has been paid out.

Book a first consultation

Official sources

Read on

Max Nodes

Founder and Managing Director of NOVARIS Consulting. Specialised in the German R&D tax credit (FZulG) since 2021; 25 of 25 accompanied BSFZ applications approved (as of 09/2026). Max Nodes

R&D tax credit for agriculture and FoodTech: process, formulation, field trial

Agri & foodtech: identify plants individually