We Have Already Received Other Public Funding. Can We Also Claim the Forschungszulage (R&D Tax Credit)?

Dr. Anne Küsters, October 26th, 2026

An existing grant approval does not automatically exclude the R&D tax credit for the same R&D project.

Other funding programmes and the R&D tax credit can generally be used alongside one another. What is not permitted is funding the same eligible expenditure twice. This distinction matters for startups that already co-finance their technical development through grants, EU funding or other public programmes.

The right question is therefore not: “Has the project already received funding?” It is: “Which specific costs have already been taken into account under the other funding programme?”

The same R&D project can generally receive funding from multiple sources

Section 7 of the German Research Allowance Act (Forschungszulagengesetz) expressly permits the R&D tax credit to be used alongside other funding or state aid for an eligible research and development project. This generally also applies where the other funding is provided through EU funds. Startups therefore do not have to choose between project funding and the R&D tax credit.

This is particularly relevant for technology-intensive companies. A multi-year development project can include several cost categories: employees develop the core technology, an external partner carries out part of the research, and additional technical resources are deployed for the project. An existing grant may cover only some of these costs. The R&D tax credit may still be relevant for other eligible expenditure within the same project.

The boundary is defined by costs, not by the project name

The decisive constraint is the prohibition of double funding. Expenditure that has already been funded, or will be funded, under another programme or state-aid scheme may not be included again in the calculation base for the R&D tax credit. The rule is stricter than it may initially appear.

The German Federal Ministry of Finance illustrates this with an example: if personnel costs of €100,000 are used as the calculation base for another grant with a funding rate of 50%, the company receives €50,000 in funding. Nevertheless, the full €100,000 of personnel costs already considered under that grant are excluded from the R&D tax credit calculation, not only the €50,000 paid out.

The key issue is therefore which expenditure has already formed the calculation base of the other funding programme. This distinction is critical when calculating the available Forschungszulage credit.

An example: One project, two funding sources

The Federal Ministry of Finance follows this same logic in its practical examples. Costs that were not part of another programme’s funding base may still be included in the R&D tax credit calculation.

Consider a startup developing an industrial AI system over twelve months. Three developers work on the R&D project. Another public funding programme covers only the personnel costs of one developer during the first six months: €100,000 in eligible costs at a funding rate of 50%.

The R&D tax credit cannot be claimed for these costs already considered under the other programme. However, the costs of the two other developers were not included in that funding application and may therefore still be relevant for the R&D tax credit.

The same applies to a temporal separation: if another funding programme runs for only six months, the R&D tax credit may generally be claimed for the unfunded second half of the year. The deciding factor is not whether the project has already received funding, but which specific expenditure and time periods were included in the other programme’s funding base, provided all other requirements for the Forschungszulage are met.

Funding programmes should be planned as a funding stack

For startups, this is less a legal detail than a question of financing architecture. Public project funding, the R&D tax credit and venture capital can finance different parts of the same technical roadmap. These instruments work together effectively only when it is clearly documented which costs are assigned to which source of funding. Reconstructing this allocation only after the project has ended makes the calculation unnecessarily complex.

A better approach is to document from the start of the R&D project which employees, work packages and external services are covered by another funding programme, and which costs arise outside it. Multiple funding sources are possible. Funding the same cost item twice is not.

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Disclaimer: This article provides general information and does not constitute tax or legal advice. Actual eligibility and the amount of the R&D tax credit depend on the individual circumstances.