German R&D Tax Credits: New Administrative Instruction by Federal Ministry of Finance Tightens Documentation Requirements

German R&D Tax Credits: New Administrative Instruction by Federal Ministry of Finance Tightens Documentation Requirements

 

• General Time tracking alone is no longer sufficient
• German tax authorities rule out estimates of personnel costs and clarify requirements for project-specific working time records
• innoscripta began transitioning all customers to ongoing employee self-reporting via Clusterix before the new Administrative Instruction was published

Tutzing, 10 November 2026 – innoscripta SE (ISIN: DE000A40QVM8) draws attention to a significant change introduced by the German Federal Ministry of Finance (BMF) in its administrative instruction on the Research Allowance Act (Forschungszulagengesetz). In late October 2026, the BMF published updated administrative Instructions replacing the previous version from 2023. The new version explicitly states that eligible personnel costs cannot be taken into account if the supporting documentation is missing or inadequate. The tax authorities now consider such approaches inadmissible, as set out in paragraph 128 of the guidance. The new rules generally also apply to prior fiscal years that remain open for assessment. The BMF does not prescribe the use of any specific time-tracking Software AG . For employees who can demonstrably be shown to work exclusively on eligible R&D projects and perform qualifying activities, the guidance provides certain simplifications under specific conditions (paragraph 115).

innoscripta had already begun transitioning its customers to ongoing employee self-reporting before the new guidance was published. Within its Clusterix Software AG platform, employees can document their activities. The platform links these records to working hours captured by the connected time-tracking system and the respective R&D projects. A monthly closing process records the status of the documentation and ensures that subsequent changes remain traceable.

For previous fiscal years, Clusterix supports the structured processing of existing project documentation to allocate activities and working periods to the relevant R&D projects and identify potential gaps in supporting records.

Matthias Helke, Tax Advisor and Partner at Flick Gocke Schaumburg, comments: “The new BMF guidance underscores the importance of maintaining verifiable documentation of the research activities actually performed on a daily basis. What matters is not merely whether an employee was involved in an eligible R&D project, but also the amount of time they actually spent working on it. A blanket allocation of working time without a reliable evidentiary basis is no longer sufficient under the tax authorities’ now explicitly stated interpretation.”

A detailed assessment of the latest BMF guidance by Matthias Helke is available at the following link: https://www.innoscripta.com/en-de/about-us/blogs/forschungszulage-bmf-tightens-documentation-requirements

Michael Hohenester, CEO of innoscripta SE, comments: “Many companies believe that their general time-tracking systems already put them in a strong position. However, the new BMF guidance makes it clear that, for the purposes of R&D tax credits, working hours must be specifically allocated to eligible projects. This is precisely why we have expanded the functionality for ongoing, project-specific employee self-reporting within Clusterix. This enables companies to document their research activities in a transparent and verifiable manner and rely on a structured, robust data foundation in the event of subsequent tax audits.”

About innoscripta

innoscripta SE offers Clusterix, a scalable Software AG platform for the structured organization and management of research and development activities. Companies use Clusterix to efficiently manage innovation projects, digitize internal processes, and make their R&D activities transparent and scalable.

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