The R&D premium is a research funding that can be also claimed by startups. Recently the Austrian government approved the draft of the tax amendment act 2022 (AbgÄG 2022) which also includes positive changes concerning the R&D premium. In the following, we provide an overview of the essential aspects of the R&D premium and the planned changes.


  1. General overview

Generally, the tax-free cash R&D premium is a central instrument of R&D funding for companies and can be claimed by individual enterprises, partnerships and limited liability companies if they carry out qualified R&D activities and meet the necessary requirements (in line with the Frascati Manual). The objective must be to increase the state of knowledge and to develop new applications of this knowledge.

Both, in-house research (performed in Austria) and contract research (contractor must be based in the EU/EEA region and has to be a company or institution involved in research and experimental development tasks) are eligible for this premium. However, in case of contract research the R&D premium cannot be claimed by both, the principal and the contractor. The contractor is just able to apply for the premium if the principal does not.


  1. Current framework conditions for R&D premium



A separate form (E 108c) must be filed with the tax authorities stating the amount of the R&D premium. If the premium is approved, it is credited directly to the tax account. Thus, it also benefits companies that do not make a profit in the research year, which is ideal for startups. The premium itself is not taxable.

A free expert opinion from the Austrian Research Promotion Agency (FFG) must also be requested electronically via FinanzOnline. In this context, a technical description of the R&D activities per project must be submitted. The FFG assesses whether the R&D activities meet the necessary requirements. The FFG is only responsible for checking the quality of the content of the proposal and not for checking the R&D expenditures itself.

If the FFG has doubts about the eligibility for funding, the tax office will usually issue a supplementary request for the purpose of further explanations. If a R&D premium application is (partially) rejected by the tax authorities due to a negative opinion of the FFG, an appeal can be filed against this assessment.



Currently a company can apply for the R&D premium until the (corporate) income tax assessment has become final (e.g. a CIT assessment becomes final 1 month after the issuance of the tax assessment).



The R&D premium amounts to 14% and can be claimed for the following qualified R&D expenditures:

  • Wages and salaries for employees in research and experimental development, as well as fees from corresponding work contracts
  • Direct expenses and direct investments as they serve sustainable research and experimental development
  • Financing expenses to the extent that they occur due to research and experimental development
  • Overhead costs to the extent that they are attributable to research and experimental development (e.g. payroll accounting costs if they are attributable to research personnel, pro rata administrative costs, but no distribution costs)

In case of contract research, the privileged R&D costs are capped at EUR 1 million per year at the level of the principal.


  1. Changes according to draft Tax Amendment Act 2022 (AbgÄG 2022)

The following new regulations are to be relevant for the first time for premiums relating to the calendar year 2022:

  • In order to especially support start-ups and small enterprises, it should be possible to include a fictitious entrepreneur’s wage amounting to EUR 45/hour for activities performed in the area of R&D in the application (capped with EUR 77.400 per person und financial year).
  • Furthermore, the application deadline for the R&D premium shall be separated from the (corporate) income tax assessment.
  • In addition, it shall also be possible, that a specific part of a premium application may be assessed separately. This should make it possible to receive partial payments from premium applications.


  1. Outlook

When claiming fundings, start-ups should also evaluate the possibility of an R&D premium. Especially since companies that do not make a profit in the research year also benefit, which is ideal for startups. With regard to the planned positive changes regarding the R&D premium through the Tax Amendment Act 2022, the final implementation remains to be seen.



Christoph Puchner, Managing Partner and Tax Advisor & Mehmet Erdem, Senior Tax Manager from ECOVIS Austria, one of the leading tax consultants in Austria in the startup sector.