The state refunds part of your development costs. This also applies to contract research: when a partner like IOX develops your connected product, the order counts. In 30 minutes we show you what is in it for you.
Entitlement
Legal entitlement, no deadlines
Funding rate
25 %, 35 % for SMEs
Orders to IOX
70 % of the order value eligible
No tax liability needed
Payout instead of offsetting
The principle
The research allowance is a tax incentive for research and development. There are no funding pools and no deadlines. If you meet the requirements, you get it.
Regardless of size, industry and legal form.
The funding rate on eligible costs.
Offset against your tax, or paid out if you have no tax liability. This especially helps start-ups.
Contract research
If you outsource development as contract research to a service provider in the EU, 70 % of the order value is eligible. You file the application as the client. IOX is based in Cologne, and our projects meet this condition.
Eligible
Something technically new, with risk and a planned approach. Series maintenance and pure certification usually do not qualify.
Research does not mean a lab
A prototype whose function is not yet certain. A radio link that has to get through metal or concrete. A device that has to get by on milliwatts. What matters is a real technical question whose answer is open at the start. In IoT and embedded development, that is often the case.
Example calculation
Development order to IOX (net)
€250,000
of which eligible (70 %)
€175,000
with overhead flat rate (20 %)
€210,000
Research allowance for an SME (35 %)
around €73,500
Example for an SME with a project start from 2026. Without the overhead flat rate, or as a larger company, the amount is smaller. Whether a project is eligible is decided case by case by the Certification Body for the Research Allowance and the tax office.
Existing customers
Then it is worth a look back. You get money for work that has already been paid for. Talk to us, and we will compile the technical details of your project.
Application deadline
31 Dec 2026
For projects from 2022 onwards, the research allowance can still be applied for until this date.
Process
1
30 minutes, free of charge
You talk to one of our experts. Together you clarify which projects come into question.
2
By the Certification Body for the Research Allowance
The Certification Body for the Research Allowance checks whether your project is research and development. We supply the technical part.
3
With certification
With the certification you file the application. Our experts prepare the documents with you.
Frequently asked questions
Who files the application when IOX develops?
You do, as the client. The research allowance belongs to the company that commissions and pays for the development, not to the development service provider. IOX gives you the technical details of the project that you need for the certification. The application runs in two steps: First, the Certification Body for the Research Allowance certifies that your project is research and development. With this certification you file the application with the tax office. Applications are filed annually in retrospect, after the work has been carried out.
Is developing connected products and IoT eligible for the research allowance?
Yes, if it is real development: a technical question whose answer is open at the start, such as a radio link through metal or concrete, a very tight power budget or a new architecture. Series maintenance and pure certification usually do not count. The certification body for the research allowance and the tax office decide each case individually. In the funding check we assess it with you.
Do large companies also get the research allowance?
Yes. Taxable companies based in Germany are eligible, regardless of size, industry and legal form. The funding rate is 25 %, and 35 % for small and medium-sized enterprises (SMEs). There are upper limits: Eligible expenses are capped at €12 million per year. The maximum funding is €3 million per year, and €4.2 million for SMEs. This maximum applies to the entire group of companies.
What if my company makes no profit?
Then the allowance is paid out. Normally the tax office offsets it against your tax liability. If you have no tax liability, for example because you are making losses, it is credited to you in full and paid out. This is especially interesting for start-ups that develop a lot and do not yet make a profit. The allowance itself is tax-free. As a result, the effective funding rate is higher than for project grants, which in most cases have to be taxed.
Does this also work for completed projects?
Yes. The research allowance can be applied for up to four years retroactively. If the application is received by 31 December 2026, projects from 2022 are still possible. With every turn of the year, another year drops out of this window. If you have developed with IOX in the past and have not yet applied for the research allowance, you get money for work that has already been paid for. We compile the technical details of your project. So it is best to get in touch in good time before the end of the year.
What is the overhead flat rate?
A flat 20 % surcharge on the eligible costs. It covers overheads such as rent, electricity or administration without you having to itemize them. You save yourself receipts and allocations, and the eligible base gets larger. We clarify whether it applies to your order in the funding check. The next question shows what the calculation looks like without the flat rate.
How high is the allowance without the overhead flat rate?
With an order value of €250,000, €175,000 is eligible, which is 70 %. For an SME, 35 % of that gives around €61,250, and for a larger company at 25 % around €43,750. With the overhead flat rate, the base rises to €210,000, and an SME reaches around €73,500, as in the example calculation above. The actual amount depends on the individual case: The Certification Body for the Research Allowance and the tax office decide on eligibility.
Do we have to publish results?
No. There is no publication obligation, neither for research results nor for project titles. Your know-how stays with you. No documentation has to be submitted with the application. However, keep the project documents ready so you can show them in a tax audit.
Does IOX give tax advice?
No. We put you in touch with one of our experts and provide the technical input for your project. IOX does not provide tax advice. The tax side is with your tax advisor. We take care of our part, the technical description of your development.
Next step
We put you in touch with one of our experts. Together you clarify which of your projects are eligible.
IOX arranges the contact and provides the technical input. We do not provide tax advice.
Please don't send anything confidential yet. We're happy to sign an NDA before documents are exchanged.
Contact: Benjamin Plier · benjamin.plier@ioxlab.de · +49 211 54554890
IOX GmbH, Cologne, is responsible for this form. We only use your details for this request. More in the privacy policy.