At the end of 2019, the legislator decided to introduce tax incentives for research. This was a long-standing demand of the entire industry. The VDGH sees this as a strong signal for the industry and for Germany as a research location. The design as a research allowance provides a scalable instrument that is open to all technologies and accessible to companies of all sizes. Fortunately, in the course of the procedure, the legislator has also included a regulation according to which, in the case of contract research, the client and not the research institution receiving the contract is funded.
The Research Allowances Act should be gradually expanded financially. The practical dialog on the requirements of companies for the funding instrument should also be taken into account. This is essential for the long-term success of this funding instrument. The limitation of the maximum funding amount of one million euros per company should also be reviewed in the future. An increase will strengthen innovation processes in SMEs and larger companies in particular.
In the wake of the coronavirus pandemic, there have been increasing calls to strengthen domestic production in order to be less dependent on international interdependencies, especially in times of crisis. This was evident, for example, in the discussion about the availability of coronavirus vaccines. As there are also interdependencies between research and development and production, it would make sense to extend the instrument of tax incentives to certain productions.
The promotion of research remains an ongoing task. Research forms the basis for innovations that are necessary from a medical and economic point of view. Therefore, the legislator must not stop now. Starting points include, in particular, improving the transparency of research funding in line with international models and increasing R&D funding for the economy, especially for future industries such as healthcare and the bioeconomy.