Forschungszulage for Mechanical Engineering (Guide)

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1) Why the Forschungszulage is so powerful in mechanical engineering

Mechanical and plant engineering is one of the most active user sectors of the Forschungszulage. According to the ZEW/VDMA study (as of end of January 2024):

• 1,588 companies from mechanical and plant engineering have filed applications. (ZEW-PDF) (zew.de)
• A total of 4,507 projects were submitted (representing 17.0% of all projects in Germany – the top-ranking sector). (ZEW-PDF) (zew.de)
• 85.9% of projects were approved/partially approved. (ZEW-PDF) (zew.de)
• €1.47 billion in eligible R&D expenditure was claimed in approved/partially approved projects. (ZEW-PDF) (zew.de)
• The (extrapolated) annual funding volume for the sector is around €200 million – with a potential of approx. €800 million per year, there is still significant headroom. (ZEW-PDF) (zew.de)

My conclusion: There is money available – but it is not collected automatically. Many mechanical engineering companies miss out not because they lack R&D, but because of uncertainty, administrative burden, and a lack of internal resources. That is exactly where I focus my work in practice.

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2) How much funding is available? (as of 2026 – with clear figures)

How high is the funding?

The Forschungszulage is a tax-based incentive: it reduces the tax burden or can – depending on the situation – be paid out.

Current mechanics (basic principle)

• Funding rate: generally 25% of eligible R&D expenditure.
• KMU receive 35%.
• The mechanical engineering sector uses the Forschungszulage because it is not sector- or topic-specific – what counts is the R&D quality of the project.

Important extensions since 2024 (and particularly relevant from 2026)

• Assessment base up to €10 million per year (for expenditure after 27.03.2024 and before 01.01.2026). (zeitmaker.com)
• From 01.01.2026 the assessment base rises to €12 million (for expenditure incurred after 31.12.2025). (zeitmaker.com)
• Contract research: 70% claimable (instead of 60%). (zeitmaker.com)
• Depreciation on movable assets (e.g. machinery, measurement and test equipment) can be eligible – if project-related and exclusively used (details below). (zeitmaker.com)
• New from 2026: 20% overhead flat rate (for projects that start after 31.12.2025) – a real lever for many mechanical engineering companies, as it allows additional overhead and operating costs to be included on a flat-rate basis. (zeitmaker.com)
• New from 2026: Own contributions (sole traders / partnerships): €100/h (max. 40h/week). (zeitmaker.com)

Maximum amounts (rule of thumb as I communicate them for mechanical engineering in 2026)

• KMU: up to €4.2 million per year
• Non-KMU/large companies: up to €3.0 million per year (vci.de)

These magnitudes are the reason I describe the Forschungszulage in mechanical engineering as a "cash flow lever": it is retroactive, non-repayable, and when structured properly, predictable.

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3) What counts as an eligible R&D project in mechanical engineering?

The BSFZ does not evaluate "marketing-driven innovation" – it evaluates R&D according to core criteria. Translated into practical terms:

1. Novelty (for your company / the state of the art)
2. Technical uncertainty (it is open whether and how it will work)
3. Systematic approach (structured development process)

Eligible examples in mechanical engineering

Eligible examples in mechanical engineering

• Development of an energy-efficient gripper/end-effector with a new sensor system
• New testing technology/test rigs with variable load control
• Integration of machine learning for fault detection in manufacturing processes
• Additive manufacturing with new materials or process parameters
• Novel drive or control concepts, digital twins, highly dynamic control systems

Important: it does not need to be "groundbreaking." Even "small" technical breakthroughs are eligible – as long as the uncertainty and the systematic solution approach are clearly explained.

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4) Which costs are eligible in mechanical engineering?

In mechanical engineering, the cost logic often determines the level of funding. Typically eligible:

4.1 Personnel costs (the most important block)

• Working time of developers, designers, technicians, software/automation staff, etc.
• Requirement: R&D connection + traceable attribution

Practical pitfall: The ZEW/VDMA report identifies the documentation of R&D personnel costs as the biggest challenge at the tax office (including time recording, personnel cost rates). This is where processes determine speed and the volume of queries. (ZEW-PDF) (zew.de)

4.2 Contract research / external R&D

• Research and development orders placed with universities, institutes, or development service providers
• Claimable portion of contract costs:
• 60% (for expenditure up to 27.03.2024)
• 70% (for expenditure from 28.03.2024)
• Important: Only R&D orders count as contract research if the contractor is based in the EU or EEA (zeitmaker.com)

4.3 Machinery/equipment (since 2024: often a "game changer" in mechanical engineering)

• Depreciation on depreciable, movable assets (e.g. machinery, measurement technology, test equipment) can be eligible,
• if they were acquired/produced after 27.03.2024,
• used exclusively for the specific R&D project,
• and only the depreciation during the project period is claimed (not the purchase price). (zeitmaker.com)

4.4 Own contributions (sole traders / partnerships)

• €70/h for activities up to 31.12.2025 (max. 40h/week)
• €100/h for activities from 01.01.2026 (max. 40h/week) (zeitmaker.com)

4.5 New from 2026: Overhead flat rate (20%)

For projects that start after 31.12.2025, additional overhead and other operating costs can be included at a flat rate of 20% of the remaining eligible expenditure. In practice, this often reduces the "documentation and attribution stress" and makes the funding in mechanical engineering even more attractive. (zeitmaker.com)

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5) What is not eligible? (common misconceptions in mechanical engineering)

The most frequent misunderstandings I encounter in initial conversations:

• "We bought a machine – that must be R&D."

→ No: Investment in a standard machine for production is not R&D. Only project-related depreciation with exclusive R&D use is eligible (and only from the cut-off date of 27.03.2024).

• "We are only improving an existing product – that's not innovative enough."

→ Wrong: If you are solving a technical uncertainty (e.g. control, accuracy, cycle time, material behaviour, process stability), it can be R&D.

• "We'll document at the end – that'll be fine."

→ Often critical: Retrospective reconstruction of objectives, uncertainties, tests, and times leads to queries or rejections.

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6) The process: how mechanical engineering companies apply for the Forschungszulage (without detours)

The process consists of two stages:

1. BSFZ certification: Technical assessment of the project (R&D criteria)
2. Tax office (ELSTER): Cost submission and assessment/payment

Realistic timeline

In many cases the overall process takes around 3 months – longer if there are queries.

ZEW/VDMA practical finding: At approximately every second company, the tax office raised queries or requested additional documents. That is no reason not to apply – but a clear reason to set it up properly. (ZEW-PDF) (zew.de)

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7) What the numbers really show: the Forschungszulage works in mechanical engineering

The VDMA survey (early 2024) shows very clearly how the funds are used:

• 93% of companies deploy the funds for R&D activities. (ZEW-PDF) (zew.de)
• 55% use them to finance additional R&D activities. (ZEW-PDF) (zew.de)
• 12% hire additional R&D staff. (ZEW-PDF) (zew.de)
• 71% expect additional revenues from the R&D activities financed via the Forschungszulage. (ZEW-PDF) (zew.de)
• Only 15% expect additional investment (typical: many projects are market-oriented and strengthen existing product lines). (ZEW-PDF) (zew.de)

My conclusion: the Forschungszulage is not a "nice to have" – in mechanical engineering it is often a direct revenue and competitive lever, particularly during economically challenging periods.

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8) Why zeitmaker.com makes the difference in mechanical engineering (with figures)

When mechanical engineering companies come to me, it is almost never about "whether eligible" – it is about how quickly, how securely, and how much.

What you gain concretely with zeitmaker.com (measurable):

• Up to €4.2 million per year (KMU) or up to €3.0 million per year (non-KMU) as a tax-based incentive – we secure the Forschungszulage in a way that is audit-proof and predictable. (vci.de)
• Fewer queries through structured project language (BSFZ) and robust cost logic (tax office/ELSTER) – exactly where most companies struggle according to VDMA/ZEW (personnel cost documentation, time recording, document requests). (ZEW-PDF) (zew.de)
• Time savings through clear templates, clean project delineation, and lean documentation, so your team does not spend weeks on wording and rework.

If you would like, we can assess specifically in an initial call:

• Which of your current development projects are immediately suitable as R&D projects,
• which cost blocks (personnel, contract research, depreciation, overhead flat rate from 2026) are realistically claimable,
• and how to set up documentation that will stand up to BSFZ and tax office scrutiny.

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Mechanical engineering R&D is often eligible – but only if set up correctly

The figures from mechanical and plant engineering speak clearly: high utilisation, high approval rate, strong impact on market-oriented R&D and expected additional revenues. At the same time, potential is being left on the table – mainly due to information gaps, lack of resources, and process uncertainty (details: ZEW/VDMA report 2024, PDF). (ZEW-PDF) (zew.de)

If you develop in mechanical engineering, the most important question is not "whether" – but how much Forschungszulage you can securely claim per year.

I support you through zeitmaker.com – with an approach focused on figures, evidence logic, and practical processes.

FAQs

1) Which mechanical engineering projects are typically eligible for funding?

Eligible are R&D projects in which you systematically solve technological uncertainties – e.g. new manufacturing processes, automation/robotics, digital controls, sensor systems, AI-supported quality assurance, or novel test rigs. What matters is not "world novelty" but novelty + technical risk + structured approach.

2) Is prototype construction in mechanical engineering eligible?

Yes – if the prototype is part of an R&D project (e.g. for validation, testing, or iteration) and you are addressing a technical uncertainty with it. Pure pre-series production/industrialisation without an R&D character is generally not eligible.

3) Which costs can we claim (and what changes in 2026)?

Typical eligible costs include:

• Personnel costs for development/design/testing/software, as far as clearly attributable to the R&D project
• Contract research / external R&D orders (since 28.03.2024 claimable at 70%; generally for contractors based in EU/EEA)
• Depreciation (AfA) on movable assets (e.g. machinery, test rigs), if used exclusively for the R&D project (eligible for acquisitions/production after 27.03.2024)
• From 01.01.2026: 20% overhead flat rate (for projects starting after 31.12.2025) as well as own contributions for sole traders/partnerships at a flat rate of €100/h (max. 40 h/week)

4) How high is the funding – and what is the maximum?

The Forschungszulage amounts to 25% of eligible expenditure (for KMU 35% since 28.03.2024). The assessment base depends on the timing of the expenditure:

• up to 27.03.2024: max. €4 million
• 28.03.2024 to 31.12.2025: max. €10 million
• from 01.01.2026: max. €12 million

The theoretical annual ceiling is correspondingly higher depending on the period and company status (KMU benefit additionally via the 35% rate).

5) Can we apply retroactively?

Yes. Expenditure can be claimed retroactively – as long as the assessment period for the relevant tax assessment is still running. It is regularly 4 years, but the start depends, among other things, on when the tax return was filed; in addition, the period can be extended by suspension provisions or amount to 5 or 10 years in special cases.

6) How good are the chances in mechanical and plant engineering?

Very solid: According to the ZEW/VDMA analysis, up to the end of January 2024, 86% of projects were approved or partially approved. That is a strong signal that mechanical engineering R&D is fundamentally well suited to this instrument.

7) What are the biggest practical risks – especially with the tax office?

From my experience, the most common obstacles are:

• Unclear R&D delineation (too little "technical uncertainty" and solution logic)
• Weak traceability of personnel costs (hour logic, roles, cost rates)
• Queries/additional requests from the tax office: According to VDMA/ZEW, approximately every second company faced queries or additional document requests during the process

Anyone who sets this up correctly from the start saves months.

8) Is external support worth it – or can we handle it internally?

In principle it is possible internally, but in practice, according to the VDMA survey, the majority of mechanical engineering companies use external support (e.g. for project description and cost logic). The leverage lies not in "filling in a form" but in solid R&D argumentation + audit-proof documentation.