R&D Tax Credit by legal form: GmbH and sole proprietorship compared
The funding rate is the same for every legal form, 25 %, 35 % for SMEs (Section 4(1) FZulG). What differs is what counts: sole proprietors claim their own R&D hours, a GmbH only the salary of an employed managing director.
- Funding rate 25 %, 35 % for SMEs, independent of legal form
- EUR 100/h only for sole proprietors and co-entrepreneurs (Section 3(3) FZulG)
- GmbH managing directors count only with an employment contract (Section 3(1) FZulG).
Written by Max Nodes, Founder and Managing Director · 25 of 25 supported BSFZ applications certified (as of 09/2026) · Last updated: · Law as of:
One project, different legal structures
Figures and details
Only sole proprietors and co-entrepreneurs claim hours (Section 3(3) FZulG).
Key facts in brief
The R&D Tax Credit is open to every legal form, but what flows into the assessment base differs. Sole proprietors and co-entrepreneurs of a partnership claim their own R&D hours at EUR 100 per hour, at most 40 hours per week (Section 3(3) FZulG). A GmbH, UG or AG has no such option: shareholders and managing directors count only with a salary through an employment contract, as personnel costs (Section 3(1) FZulG). The funding rate itself is the same for every legal form, 25 %, 35 % for SMEs (Section 4(1) FZulG), the assessment base is capped at EUR 12 million per year (Section 3(5) FZulG).
The essentials on legal form
What changes with the legal form?
Personnel costs count the same in every legal form; the difference lies in the owner's own working time and the managing director's salary.
| Criterion | GmbH, UG, AG | Sole proprietorship |
|---|---|---|
| Personnel costs of employees | yes Gross salary + employer contributions (Section 3(1) FZulG) | yes Gross salary + employer contributions (Section 3(1) FZulG) |
| Managing director's salary | yes Counts as personnel costs, only with an employment contract (Section 3(1) FZulG) | N/A, the owner has no managing director contract |
| Owner's own contribution | no Excluded, even without a salary (Section 3(3) FZulG) | yes EUR 100/h, at most 40 h/week (Section 3(3) FZulG) |
| Funding rate | 25 %, 35 % for SMEs (Section 4(1) FZulG) | 25 %, 35 % for SMEs (Section 4(1) FZulG) |
| Assessment base cap | EUR 12 million per fiscal year (Section 3(5) FZulG) | EUR 12 million per fiscal year (Section 3(5) FZulG) |
| Tax offset | Corporate tax (Section 10 FZulG) | Income tax (Section 10 FZulG) |
| Payout in a loss year | yes The excess amount is refunded (Section 10 FZulG) | yes The excess amount is refunded (Section 10 FZulG) |
| Who applies | The company applies | The owner applies herself |
Why does a GmbH get a different allowance than a sole proprietor for the same research?
The funding rate is the same in every legal form. The difference lies in the assessment base: whose working time counts, who applies, and how the allowance is offset.
Personnel costs count the same in every legal form: gross salary and employer contributions of employed staff (Section 3(1) FZulG). The difference concerns only the own working time of owners, shareholders and managing directors. Affiliated companies add a second layer: they share both the assessment base and the SME status, regardless of the legal form of the individual company. Details on the corporate tax offset are on the page R&D Tax Credit and Corporate Tax.
Which legal form can claim its own working time?
Only two legal forms can claim their own R&D hours: sole proprietors and co-entrepreneurs of a partnership. For every other legal form, own time counts only with a salary.
| Legal form | What counts toward the assessment base | Legal basis |
|---|---|---|
| Sole proprietor / freelancer | yes Own R&D hours, EUR 100/h, at most 40 h/week, as a flat rate with no cost evidence | Section 3(3) FZulG |
| Co-entrepreneur of a partnership (GbR, OHG, KG) | partly Only a validly agreed, actually paid activity remuneration, capped at EUR 100/h | Section 3(3) FZulG |
| GmbH managing director with an employment contract | yes Gross salary plus statutory employer contributions to future provision | Section 3(1) FZulG |
| GmbH shareholder or managing director without an employment contract | no nothing, even without a salary | Section 3(3) FZulG (exclusion) |
Does a managing director's salary replace the own-contribution flat rate?
No: a salary and an hourly rate follow different calculations, an employment contract only partly closes the gap.
Without an employment contract, a shareholder's working time remains excluded in any legal form that is not a sole proprietorship or a co-entrepreneurship. An employment contract with a market-rate salary can partly close the gap, but it does not replace the own-contribution flat rate one for one: a salary and an hourly rate follow different calculations. How a managing director's salary is calculated instead is shown on the page Personnel Costs.
What applies to a GmbH & Co. KG and affiliated companies?
Two special cases change the calculation further: the mixed legal form GmbH & Co. KG and SME status within a corporate group.
- GmbH & Co. KG: The general partner GmbH has no own working time in the assessment base, it is a corporation. Limited partners who qualify as co-entrepreneurs and research themselves may claim their activity remuneration, capped at EUR 100/h (Section 3(3) FZulG).
- Affiliated companies: Several companies within a group share the EUR 12 million assessment base (Section 3(6) FZulG).
- SME status: For the increased 35 % rate, the employee count and turnover of affiliated companies count too. A single GmbH with 50 employees can lose its SME status if it is part of a larger group.
- Change of legal form: Own working time that was eligible as a sole proprietor lapses after converting to a GmbH.
- Tax group (Organschaft): In a fiscal unity for income tax purposes, only the parent company applies for the R&D Tax Credit. All subsidiaries still share the same EUR 12 million assessment base, regardless of their own legal form.
Contract research and the 20 % overhead flat rate apply the same in every legal form; details are on the page Contract Research.
Which questions come up most often about legal form?
What does this mean in figures?
At the same personnel cost, the sole proprietor's own working time adds more to the assessment base than the salary of an employed GmbH managing director.
GmbH with an employed managing director
Personnel costs of EUR 60,000 include the salary of the employed managing director; he has an employment contract and demonstrably performs R&D activities.
Without an employment contract, his salary would not count (Section 3(1) FZulG).
Sole proprietor with 1,000 hours of own R&D time
Personnel costs for one part-time employee: EUR 60,000. The owner adds 1,000 hours of her own working time.
The 1,000 hours are a true flat rate with no cost evidence required (Section 3(3) FZulG).
At identical personnel costs of EUR 60,000, the sole proprietor's own contribution adds to the assessment base, while for the GmbH only the managing director's salary counts. The legal form should follow the business model, not the R&D Tax Credit: a conversion costs time and money and forfeits the own-contribution flat rate.
Classify your legal form correctly and use the full assessment base
In the first consultation we check which working time and which costs count for your legal form, and calculate your assessment base. No result, no invoice.
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- Own ContributionsEUR 100 per hour: the rules for sole proprietors and co-entrepreneurs in detail.
- Personnel Costs & R&D Tax CreditClaiming salaries and employer contributions correctly, the same for every legal form.
- R&D Tax Credit and Corporate TaxHow the allowance is offset against corporate tax for a GmbH.
- Contract Research70 % of the fee for external R&D contracts, independent of legal form.
- R&D Tax Credit CalculatorCalculate the assessment base and allowance from your own figures.
- R&D Tax Credit (FZulG): the guideRequirements, funding amount and the BSFZ application at a glance.
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