On August 30, 2023, the German Cabinet approved the government draft for the “Act to Strengthen Growth Opportunities, Investment and Innovation as well as Tax Simplification and Tax Fairness” (in short: Growth Opportunities Act). It provides for tax relief of around seven billion euros per year from 2024 and a total of over 32 billion in the coming years.
The government draft of the Growth Opportunities Act not only talks about tripling the research allowance (=max. 3 million euros in funding per fiscal year), but also about a 10 percent increase for SMEs.
Another piece of good news is that the research allowance under the Growth Opportunities Act will in future apply not only to personnel costs, but also to material costs. Thus, from 2024, movable fixed assets that are acquired or manufactured after December 31, 2023, and that are required to carry out the research and development project will be eligible. Contract research, in turn, will be subsidized at 17.5 percent (instead of the previous 15 percent) from 2024.
In addition, it is planned to increase the eligible expenses for contract research from 60 to 70 percent. The increase in the assessment basis to twelve million euros is of interest to larger companies.
The management’s own work can now be subsidized at 70 euros per hour (instead of 40 euros per hour). This is particularly exciting for individual entrepreneurs, who can now have their invested time recognized and subsidized. Growth Opportunities Act: Preempting the flood of applications.
Since the topic is very media-savvy, it is advisable to act quickly and start the application process in order to get ahead of the impending wave of applications. The offices are already almost at their limit.
Further information from the Federal Minister of Finance “Creating opportunities for growth”.
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