Why large companies work with NOVARIS

Within a group, one assessment basis of EUR 12 million applies to all affiliated companies together (§ 3 (6) FZulG). How much of it arrives depends on the structure: which entities are affiliated, where development sits and which entity claims which share. We map the ownership tree before the first application is written.

Have your portfolio assessed in 30 minutes Dossier

Structure analysis across all entities
Up to EUR 3.0 million allowance per year for the group
Allocation of the cap stated in the application (§ 5 FZulG)

Written by Max Nodes, Founder & Managing Director · Last updated: September 10, 2026

Your research allowanceLegal position from 2026

R&D personnel costs per year € Sum across all affiliated entities; the EUR 12 million cap applies to the group (§ 3 (6) FZulG) Development contracts with third parties € 70 % of the fee counts (§ 3 (4) FZulG)

SME under Annex I GBER

fewer than 250 employees, up to EUR 50 million turnover or EUR 43 million balance sheet total

Project and year

The 20 % flat rate applies only to projects started after 31 December 2025 (§ 3 (3b) FZulG). Cap: EUR 12 million for expenses from 2026, EUR 10 million for 2024 and 2025 (§ 3 (5) FZulG).

R&D personnel costs (employer gross)EUR 12,000,000

Development contracts with third parties · 70 %+ 0

Overhead flat rate 20 %+ 0

Assessment basisEUR 12,000,000

Funding rate 25 %EUR 3,000,000

Research allowance per year EUR 3,000,000 30 % of personnel costs

Offset against the tax assessment, any surplus is paid out (§ 10 FZulG)

Take these figures into a first consultation

Key facts in brief

Large companies file the German research allowance with NOVARIS because in a group the problem is not eligibility but structure. The assessment basis of EUR 12 million applies to affiliated companies together (§ 3 (6) FZulG); companies are affiliated where one exercises controlling influence under § 290 HGB. The funding rate is 25 %, since 2026 on 120 % of eligible expenses, which means at most EUR 3.0 million allowance per year for the whole group. NOVARIS maps the ownership tree and the R&D expenses of every entity, runs the allocation of the cap and delivers the BSFZ application series together with the allocation document under § 5 FZulG. We take over the preparation of hours for each entity and stay with the group until approval. Before that, Max Nodes held a leadership role at the largest provider of research allowance consulting in Germany, where he wrote more than 90 applications and supported 50 companies through to approval. Fee success-based.

Definition

Why should a large company file the research allowance with NOVARIS?

Because a tax department masters the second stage, while the first stage is a technical procedure. The BSFZ checks novelty, technical risk and a systematic approach for each project, and it does so for each entity separately. NOVARIS takes over the screening of the development portfolios, the scoping of the projects, the application series at the BSFZ and the allocation of the assessment basis, which your tax department then carries into the Annex FZ forms. The amount of the allowance is explained on research allowance amount.

Assessment basis EUR 12 million for affiliated companies together (§ 3 (5) and (6) FZulG)
Funding rate 25 %, with the 20 % overhead flat rate effectively 30 % of personnel costs (§ 3 (3b), § 4 (1) FZulG)
State aid per project including the allowance at most EUR 15 million (§ 4 (3) FZulG)
Application per entity, allocation of the cap stated in the application (§ 5 FZulG)

25+engagements supported
EUR 18.85Mfunding volume filed
25 of 25BSFZ applications approved (as of 09/2026)
3.5 monthsto the BSFZ certificate on average

What does a group get from NOVARIS?

Structure analysis: We map the ownership tree under § 290 HGB, assign each entity its development projects and personnel costs, and calculate the group's assessment basis with and without the cap. Result: a list per entity with the expected assessment basis and allowance.
Allocation: The EUR 12 million applies to the group as a whole. We propose which entity claims which share and document the allocation in the form § 5 FZulG requires in the application.
Application series: One BSFZ application per project and entity, in a uniform language and structure, with the hours prepared per entity from payroll and project records. We answer the certification office's queries until every certificate is issued.
Interface to the tax department: We prepare Annex FZ per entity. Filing, offsetting and booking stay with your tax department or your tax firm.
Audit file: One documentation standard for all entities: hours assigned per project, delineation, evidence of technical risk. Internal audit and the tax audit read the same file.
Fee: Success-based. No approval, no fee. 70 % of the fee falls due only once the allowance is paid out or offset.

Who at NOVARIS works on your group structure?

Group applications are teamwork between the tax department, R&D and the adviser. We bring the side that knows both procedural stages and the group rules from practice.

Max Nodes

Founder & Managing Director

Background

Leadership role at the largest provider

Before founding NOVARIS, Max Nodes held a leadership role at the largest provider of research allowance consulting in Germany. There he successfully wrote more than 90 BSFZ applications and supported 50 companies through to approval, among them large companies.

Outcome

On average 40 % more funding

The companies he supported received on average 40 % more research allowance than they had initially calculated themselves. In a group the difference comes from the structure: which entities count, where the hours sit, how the EUR 12 million is allocated.

NOVARIS

Since 2026, from the timesheet to the assessment

NOVARIS Consulting was founded in early 2026 and does nothing but research allowance. We take over the preparation of hours for every entity, write the BSFZ application series, prepare the Anlagen FZ including the allocation and stay with the group until approval. The allocation document under § 5 FZulG accompanies every Anlage FZ, so all tax offices see the same key.

Which five rules apply only within a group?

Five places in the Act that play no role for a single company and decide the amount in a group.

One cap for all affiliated companies
The assessment basis of at most EUR 12 million per financial year applies to affiliated companies together (§ 3 (5) and (6) FZulG). What counts is the affiliation at the end of the financial year. Four subsidiaries with EUR 5 million each do not get EUR 20 million together, they get EUR 12 million.
AnswerThe screening shows before the first application whether the group reaches the cap. If it does, the allocation is planned, not negotiated afterwards.
The allocation is stated in the application
§ 5 FZulG requires the application to state how the cap is allocated across the affiliated companies. Without an agreed allocation, the tax offices of the entities assess independently of each other.
AnswerWe produce the allocation as a separate document and hand it to all Annex FZ forms concerned.
25 % plus 20 % flat rate
Large companies receive 25 % (§ 4 (1) FZulG). Since 2026, overhead and operating costs count at a flat 20 % of eligible expenses (§ 3 (3b) FZulG), so 25 % on 120 %: effectively 30 % of R&D personnel costs. The 10 percentage point SME bonus does not apply.
AnswerThe worked examples below show the effect with and without the cap.
Contract research within the group
70 % of the fee for a contracted project counts at the principal (§ 3 (4) FZulG) if the contractor has its management in the EU or the EEA (§ 2 (5) FZulG). Within a group, the contract structure therefore decides in which entity the expenses land.
AnswerWe review the existing development contracts between the entities before the allocation is fixed.
State aid cap per project
The sum of all state aid for a project, including the research allowance, may not exceed EUR 15 million (§ 4 (3) FZulG). Large projects with federal or EU funding run into this.
AnswerFor every project with other funding we keep the cumulation in the file.

How is the assessment basis composed within a group?

Four entities, one cap. Each entity contributes its R&D personnel costs plus the 20 % flat rate. The total is capped at EUR 12 million, and each entity states its share in the application (§ 3 (6), § 5 (2) FZulG). Example figures, not client data.

Share of each entity in eligible expenses. The marker shows the EUR 12 million cap, which applies to the whole group.

How is the assessment basis composed within a group?
Entity	R&D personnel costs	+ 20 % flat rate	Eligible	Allocated	Allowance 25 %
Holding AG	R&D personnel costsEUR 1,200,000	+ 20 % flat rate+ EUR 240,000	EligibleEUR 1,440,000	AllocatedEUR 1,200,000	Allowance 25 %EUR 300,000
Drive Systems GmbH	R&D personnel costsEUR 4,800,000	+ 20 % flat rate+ EUR 960,000	EligibleEUR 5,760,000	AllocatedEUR 4,800,000	Allowance 25 %EUR 1,200,000
Software GmbH	R&D personnel costsEUR 3,600,000	+ 20 % flat rate+ EUR 720,000	EligibleEUR 4,320,000	AllocatedEUR 3,600,000	Allowance 25 %EUR 900,000
Materials GmbH	R&D personnel costsEUR 2,400,000	+ 20 % flat rate+ EUR 480,000	EligibleEUR 2,880,000	AllocatedEUR 2,400,000	Allowance 25 %EUR 600,000
Group total	R&D personnel costsEUR 12,000,000	+ 20 % flat rate+ EUR 2,400,000	EligibleEUR 14,400,000	AllocatedEUR 12,000,000	Allowance 25 %EUR 3,000,000

German group: four entities, one cap

Parent outside the EU, sites in Germany

eligible
partly eligible
not eligible

What counts when the parent company sits outside the EU?

Only companies liable to tax in Germany are entitled (§ 1 FZulG). Costs incurred at the parent abroad are therefore not eligible. Eligible are the own R&D personnel costs of the German entities and 70 % of the fee for contracts a German entity awards to a company whose management sits in the EU or the EEA (§ 2 (5), § 3 (4) FZulG). A contract awarded to the parent outside the EEA does not count. The EUR 12 million cap again applies to the whole group.

In-house development or an order from the parent? Four criteria decide.

If the parent commissions the German entity, the tax authorities check four criteria. Only if all four apply together is it contract research; the entitled party is then the principal (BMF circular of 7 February 2023, para. 65). If the principal sits outside the EU and is not liable to tax in Germany, nobody receives the allowance. If even one criterion is missing, it is in-house research of the German entity, and its personnel costs count in full.

01
Specific order
The parent or another affiliated company commissions the German entity with a specific task for a concrete R&D project.
02
Goals and methods from above
The commissioning company defines the research goals and the way the work is carried out, or has a decisive say in them.
03
Separate fee or budget
A separate fee or a fixed budget is agreed for the project.
04
No own subcontracting
The German entity may not commission third parties with parts of the work without the principal's consent.

All four apply

Contract research. The principal is the entitled party. A parent not liable to tax in Germany cannot claim the allowance.

At least one is missing

In-house research of the German entity. Its R&D personnel costs count at 100 %, even if the parent reimburses the costs (paras. 64 and 65).

We review the contracts and cost allocations between parent and German entity before the first application is written and show which arrangement secures the allowance in Germany. Implementation is done with your tax department.

How we analyse the structure

01
Ownership tree
Entities are affiliated if, at the end of the financial year, one exercises controlling influence under § 290 (2) to (4) HGB: majority of voting rights, right to appoint governing bodies, control agreement, special purpose entity. This also applies when the parent sits abroad.
02
R&D map
Per entity: projects, personnel costs of the staff involved, development contracts inside and outside the group. From this, the eligible expenses per entity.
03
Simulation
Total against the EUR 12 million cap. If the group exceeds it, we run the options: which entity carries which share, with an eye on tax liability, loss position and payout (§ 10 FZulG).
04
Allocation document
The chosen allocation as one document, identical in every Anlage FZ (§ 5 (2) FZulG). All tax offices involved assess the same key.

The allocation in the example is pro rata. The law prescribes no key, but requires each entity to state the allocation in its application. If one entity's assessment later changes, the assessments of the others may be adjusted even after they have become final (§ 3 (6) FZulG).

Under a tax group (Organschaft), the controlled company remains the entitled party itself. The allowance is assessed for that company and offset against its next tax assessment; any surplus is paid out (§ 10 (1) FZulG).

How does a group engagement run?

The same six steps as for a single company, but in parallel per entity. The authority durations come from the BSFZ's own figures and our engagements.

Week 1
First consultation
30 minutes with the tax department and the head of development. We assess which entities and projects qualify. Free of charge.
You + NOVARIS
Weeks 2 to 5
Portfolio screening
One conversation per project with the business units of all entities. Result: a list per entity with the expected assessment basis and a proposed allocation.
Business units + NOVARIS
4 to 8 weeks processing
BSFZ application series
One application per project and entity in the BSFZ portal, uniformly structured. Approval by the entity concerned.
NOVARIS
Certificates
Certificates
The BSFZ certifies each project. This establishes the R&D status, regardless of the entity.
BSFZ
4 to 12 weeks processing
Annex FZ forms with allocation
We prepare Annex FZ per entity, including the allocation of the EUR 12 million. Your tax department files them.
NOVARIS + tax department
Next assessment
Assessment per entity
Each tax office assesses the allowance of its entity and offsets it against that entity's next tax assessment. Any surplus is paid out (§ 10 (1) FZulG).
Tax offices

An entity's advance payments can be reduced by the expected allowance as long as the tax return has not yet been filed (§ 10 (2a) FZulG).

Tax department alone, large advisory firm or specialist: what separates the three routes?

All three routes are common. They differ in who carries the BSFZ stage technically, who coordinates the entities and how the fee works. No ranking, no prices.

Tax department alone, large advisory firm or specialist: what separates the three routes?
Criterion	Tax department alone	Large advisory firm	NOVARIS
BSFZ stage (novelty, technical risk, systematic approach per project)	partly Technical description comes from the business units	partly Staffed with tax or technical people, depending on the team	yes Research allowance only, 25 approved BSFZ applications
Annex FZ and offsetting	yes Core business	yes Core business	partly Prepared, filed by you
Allocation of the group cap	partly Possible if all projects are known	yes Common	yes Derived from the screening, as a document
Coordination of business units across entities	no Ties up tax department capacity	partly Depends on the scope of the engagement	yes One contact per project
Uniform audit file for all entities	partly Differs per entity	partly Depends on the scope of the engagement	yes One standard, hours assigned per project
Fee model	Internal capacity	Varies by firm	Success-based, 70 % after payout

A tax department with BSFZ routine does not need us for the applications, at most for screening new entities. Which providers exist is listed without ranking in the advisor register.

Frequently asked questions from large companies about the research allowance

When is NOVARIS not the right choice?

Does the EUR 12 million cap apply per entity or to the group?+

To affiliated companies together (§ 3 (6) FZulG). What counts is whether the entities are affiliated at the end of the financial year. The allocation of the cap across the entities has to be stated in the application (§ 5 FZulG).

How high is the research allowance for large companies?+

25 % of the assessment basis (§ 4 (1) FZulG). Since 2026 an overhead flat rate of 20 % counts as eligible expenses, so effectively 30 % of R&D personnel costs. With an assessment basis of EUR 12 million that is at most EUR 3.0 million allowance per financial year for the group.

Does the group file one application or each entity?+

Each entity files its own application with the BSFZ and with its tax office. What connects them is the shared cap and its allocation. NOVARIS coordinates the application series and delivers the allocation as a document.

What applies under a tax group (Organschaft)?+

The controlled company remains the entitled party itself and files the application. The allowance is assessed for that company and offset against its next tax assessment. If a surplus remains, it is paid out (§ 10 (1) FZulG).

Does contract research between group entities count?+

At the principal, 70 % of the fee counts as eligible expenses (§ 3 (4) FZulG) if the contractor has its management in the EU or the EEA (§ 2 (5) FZulG). The contract structure between the entities therefore decides the allocation. We review it before the application.

How does NOVARIS work with our tax department?+

We take over the BSFZ stage, the screening and the allocation. Your tax department receives a prepared Annex FZ per entity and files it. Offsetting, booking and advance payments stay with you.

What happens if a project already receives federal or EU funding?+

The sum of all state aid for that project, including the research allowance, may not exceed EUR 15 million (§ 4 (3) FZulG). We keep a cumulation overview per project and reconcile it with your grants office.

What does consulting cost for a group?+

The fee is success-based and depends on the approved allowance. Without approval no fee is due. 70 % of the fee falls due only once the allowance is paid out or offset. The first consultation and the assessment of the portfolio are free.

When is NOVARIS not the right choice?

Three cases in which we advise against it in the first conversation.

One entity, one project, your own BSFZ routine
If your tax department wrote the BSFZ applications of the last few years itself and they were approved, we change nothing about that. Read filing the research allowance yourself.
Pure contract development for third parties
If a customer outside the group defines the result and carries the risk, your own technical risk is missing. The BSFZ rejects such projects, and we do not take them on.
Mid-sized company without a group structure
Then it is about translation and time, not about allocation. There is a separate page for that: research allowance for mid-sized companies.

Send us the list of your entities, not a questionnaire.

In the first consultation we assess within 30 minutes which entities and projects qualify and whether the group reaches the cap. Free of charge, no obligation.

Book a first consultation

Official sources

Read on

Max Nodes

Managing Director & founder 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). Learn more

Why large companies work with NOVARIS

Key facts in brief

What does a group get from NOVARIS?

Who at NOVARIS works on your group structure?

Leadership role at the largest provider

On average 40 % more funding

Since 2026, from the timesheet to the assessment

Which five rules apply only within a group?

One cap for all affiliated companies

The allocation is stated in the application

25 % plus 20 % flat rate

Contract research within the group

State aid cap per project

How is the assessment basis composed within a group?

What counts when the parent company sits outside the EU?

In-house development or an order from the parent? Four criteria decide.

Specific order

Goals and methods from above

Separate fee or budget

No own subcontracting

How we analyse the structure

Ownership tree

R&D map

Simulation

Allocation document

How does a group engagement run?

First consultation

Portfolio screening

BSFZ application series

Certificates

Annex FZ forms with allocation

Assessment per entity

Tax department alone, large advisory firm or specialist: what separates the three routes?

What does the group end up with?

Three entities below the cap

Four entities above the cap

What do the tax audit and internal audit check, and what do we secure?

Hours assigned across entities

Allocation of the cap

Cumulation with other funding

Technical risk in the file

Frequently asked questions from large companies about the research allowance

When is NOVARIS not the right choice?

One entity, one project, your own BSFZ routine

Pure contract development for third parties

Mid-sized company without a group structure

Send us the list of your entities, not a questionnaire.

Read on