Forschungszulage in Corporate Groups: Rules & Tips

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Why this article matters

In corporate groups (parent/subsidiary companies, ownership structures, holding models, PE-backed setups), innovation projects often span multiple companies. This is exactly where things get demanding in practice: Who applies? Which costs are eligible where? And is the project "internally commissioned" or independently executed?

Anyone who resolves these questions too late risks queries, delays or an unfavourable allocation of eligible expenses.

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What are affiliated companies in the context of Forschungszulage?

The definition of "affiliated companies" in the Forschungszulagengesetz was legally clarified in 2021 and applied retroactively from 1 January 2020. Since then, the decisive factor is whether one company exerts a controlling influence over another within the meaning of § 290 para. 2 to 4 of the German Commercial Code (HGB).

Important: For the classification, what counts is the controlling influence – not whether a consolidated financial statement actually has to be prepared or whether exceptions from group accounting apply. This creates more clarity especially for high-growth, investor-driven structures (e.g. start-ups with fund/PE structures).

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The core issue in practice: In-house or contract research within the group?

In affiliated structures, delineation is often the decisive lever. Typical situations:

• A subsidiary develops a new software or product component that will later be used across the group.
• The parent finances a project "via cost allocation" – without a clear project commission.
• Multiple companies work together, but roles and rights are not cleanly documented.

In-house innovation activity (more common than you think)

If the company carrying out the work substantially controls the goals, implementation and results itself, this is usually in-house activity. In that case, the executing company is the correct applicant for its own eligible expenses.

Contract research within the group (only with clear separation)

For a project within a corporate group to be recognised as contract research, four criteria must be cumulatively met:

1. Specific commission (clearly defined task from another affiliated company)
2. Co-determination of goals and implementation by the client (material influence)
3. Separate remuneration or budget (not merely "internal cost allocation without structure")
4. Restriction on involving third parties (no subcontractors without the client's consent)

Consequence:

• All criteria met: The client can apply for the tax credit for the commissioned expenses.
• Not all met: This suggests in-house activity at the executing company.

Practical tip: The decisive factors are contracts, budget logic, IP/usage rights and actual control. These are exactly the points that should be clearly established early within the group.

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Funding cap within the group: Coordination is mandatory, not optional

Even if multiple affiliated companies each carry out innovative projects: within the group there is a shared limit per fiscal year, which must be coordinated and allocated across the group.

In addition, for the classification within the group, the reference is typically a cut-off date at the end of the fiscal year – this reduces the tracking effort when structural changes occur during the year.

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Special case: Group structures with an international dimension

Even though only companies based in Germany can apply for the tax credit, international group structures can affect the classification (e.g. company size / SME context). The group structure (shareholdings, control, key figures) should therefore be transparently recorded from the outset.

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How zeitmaker.com helps

With affiliated companies, it is rarely "one form" that decides success, but rather the system: project roles, cost logic, delineation, documentation. This is exactly where zeitmaker.com comes in:

• Clear project and group analysis: Who does what – and who should apply?
• Clean delineation of in-house vs. contract (including a look at contracts and billing)
• Structured preparation of documents so that the funding becomes predictable
• Focus on commercial innovation (especially for software, product development, processes)

Find out more at zeitmaker.com – especially in the sections on Process, Requirements and FAQ.

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