© Christian Vorhofer / Westend61
- Location advantages
- Life Sciences
- Establishment, law & taxes
Research Premium for Startups
08. September 2025Authors:
Christoph PuchnerChristoph Puchner (), Partner and Tax Advisor, & David GloserDavid Gloser (), Partner, Tax Advisor and Auditor at ECOVIS AustriaECOVIS Austria () – one of Austria’s leading tax consulting firms in the startup sector.
Research Premium for Startups
The research premium is a key funding instrument that is also highly relevant for startups.
In addition to the research premium for in-house R&D, a contract research premium of 14% can also be applied for commissioned R&D.
Quick Facts about the Research Premium
For qualified R&D activities, a tax-free research premium of 14% can be claimed. The objective of R&D activities must be to expand the state of knowledge and develop new applications of that knowledge.
The following qualified R&D expenses can be claimed under the research premium, provided they are attributable to R&D activities:
- Salaries and wages for employees engaged in R&D as well as remuneration for R&D workers who are not employed under a service contract.
(Note: For research activities carried out by sole proprietors, partners of a partnership, or shareholders of a corporation working without remuneration, a notional entrepreneur’s wage of €45 per demonstrable hour of R&D activity may be recognized, up to a maximum of €77,400 per person and fiscal year.) - Direct expenses and direct investments
- Financing costs
- Overheads
The research premium can be applied for each calendar year, with the application deadline being four years after the end of the fiscal year. Furthermore, the research premium can be claimed regardless of the startup’s financial performance (including in loss-making years).
For the sake of predictability, the research premium is to be safeguarded in its current form as an important location factor, according to the current government program.
In-House Research vs. Contract Research
A research premium can be claimed for both in-house research and contract research, with the following differences:
| In-House Research | Contract Research | |
| Definition | R&D activity is carried out by the company itself | R&D activity is outsourced to an external company or research institution |
| Procedure | Requires applying for an FFG expert opinion and submitting the research premium application as an attachment to the tax return | No FFG expert opinion required; submission of the research premium application with the tax return is sufficient |
| Utilization | To be claimed by the researching company itself | The client must inform the contractor by the end of the fiscal year to what extent they will claim the contract research premium (the contractor can then only apply for the research premium for in-house research for the part of expenses not covered by the client’s claim) |
| Domestic requirement | Research activities must take place in a domestic business or permanent establishment | The client must have a domestic business or permanent establishment and must commission the contractor (based in the EU/EEA) from this establishment |
| Assessment basis | No upper limit | Assessment basis limited to a maximum of €1 million per fiscal year |
Conclusio
R&D activities are typically very cost-intensive. Since securing financing is one of the greatest challenges for startups, it is strongly recommended to analyze in detail the requirements for claiming the research premium. Ultimately, the research premium can generate substantial funding support!