Incentive would be available for 25% of qualifying expenditure during a four-year period.
Germany’s Ministry of Finance (MOF) is considering issuing a legislative proposal that would provide for the introduction of a new research and development (R&D) tax incentive equal to 25% of qualifying expenditure during the four-year period from 2020 to 2023. The R&D tax incentive would be in the form of a cash grant upon a qualifying taxpayer’s successful application to the responsible local tax office.
The 2018 coalition agreement of the governing “grand” coalition in Germany (between the Christian Democrats and Social Democrats) included a new tax incentive for R&D activities, but did not include any specifics on the incentive. The MOF reportedly now is considering the introduction of a legislative proposal (which has not yet been officially published) that would provide for the implementation of this incentive.
The proposal from the MOF is based on the following parameters:
The introduction of the new R&D tax incentive system is expected to cost approximately EUR 5 billion over the planned four-year period.
A draft law is expected to be published soon; interested taxpayers should closely monitor further developments.
Contact
Andreas Maywald
Client Service Executive | ICE - German Tax Desk
Isabel Antholz
Senior Manager I Global Investment and Innovation Incentives
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