R&D tax credit for SMEs: 35% instead of 25%
SMEs under Annex I GBER receive 35% instead of the standard 25% funding rate (§ 4 (1) FZulG), on the same assessment basis (Bemessungsgrundlage) of at most EUR 12 million as large companies.
- 35% instead of 25% funding rate
- SME threshold: fewer than 250 employees, at most EUR 50 million turnover or EUR 43 million balance sheet
- Up to EUR 4.2 million allowance per year
Written by Max Nodes, Founder and Managing Director · 25 of 25 supported BSFZ applications certified (as of 09/2026) · Last updated: · Law as of:
Offset against the tax assessment, any surplus is paid out (§ 10 FZulG)
Assessment basis capped at EUR 12,000,000
The SME rate at a glance
SMEs receive 35% instead of the standard 25% (§ 4 (1) FZulG) on the same assessment basis of at most EUR 12 million as large companies: up to EUR 4.2 million allowance. A company qualifies as an SME under Annex I GBER (Regulation (EU) No 651/2014) if it has fewer than 250 employees and at most EUR 50 million turnover or EUR 43 million balance sheet total; partner and linked enterprises are added proportionally or in full. How NOVARIS supports mid-sized SMEs is shown on the research allowance for the Mittelstand page.
The essentials of SME status
Who qualifies as an SME for the research allowance?
A company qualifies as an SME if it has fewer than 250 employees and at most EUR 50 million turnover or EUR 43 million balance sheet total (Annex I GBER).
The research allowance pays SMEs 35% instead of the standard 25% (§ 4 (1) FZulG), at the same assessment basis of at most EUR 12 million.
| Category | Employees | Annual turnover | Balance sheet total |
|---|---|---|---|
| Micro enterprise | < 10 | ≤ EUR 2 million | ≤ EUR 2 million |
| Small enterprise | < 50 | ≤ EUR 10 million | ≤ EUR 10 million |
| Medium-sized enterprise | < 250 | ≤ EUR 50 million | ≤ EUR 43 million |
- Fewer than 250 employees
- Annual turnover at most EUR 50M
- Balance sheet total at most EUR 43M
The headcount limit always applies; only one of the two financial limits needs to be met. Linked enterprises count in full, partner enterprises pro rata (Art. 3 Annex I GBER).
A specialised consultant assesses your status before the application is filed.
How do ownership stakes affect SME status?
Stakes in or from other companies count too, depending on their size.
- Independent (under 25%): only your own figures count.
- Partner enterprise (25% up to half): proportional addition.
- Linked enterprise (over half or controlling influence): full addition.
Stay under the SME thresholds after consolidation and 35% still applies. Whole groups with controlling influence have a separate cap in the group.
What does SME status add up to in euros?
At the same assessment basis, the SME rate brings 40% more research allowance than the standard rate.
Standard rate, 25%
EUR 800,000 in personnel costs, no SME status.
SME rate, 35%
The same costs, with SME status.
40% more than the standard rate.
At EUR 12 million, the maximum allowance for SMEs is EUR 4.2 million, for large companies EUR 3 million.
What applies to affiliated companies in a group?
The assessment basis of at most EUR 12 million applies to the whole group, not to each entity.
- EUR 12 million limit for all affiliated companies together (§ 3 (6) FZulG), not per entity.
- What matters: affiliation at the end of the fiscal year.
- Each entity states its share in its own application.
Details on structure and allocation: Research allowance for large companies and groups.
Frequently asked questions about the research allowance for SMEs
Check SME status and funding rate together
In the first consultation we assess your SME status including ownership stakes. You pay only once the allowance is approved.
Book a first consultationRead on
- Check eligibilityA short check of your project in a few questions
- Research allowance (FZulG): the guideRequirements, funding amount and the BSFZ application.
- Research allowance for mid-sized companiesHow NOVARIS works with mid-sized SMEs.
- Research allowance for large companies and groupsAffiliated companies and the EUR 12 million limit.
- Funding amount of the research allowanceHow the assessment basis and allowance are calculated.
- Claiming owner contributionsEUR 100 per hour for sole proprietors.
- Research allowance consultingSuccess-based fee, free first consultation.
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