The research grant for software development: A guide for companies

> Key Takeaway: The research allowance funds R&D activities in software development with up to 25% of eligible personnel costs — retroactively and regardless of company size.

Eligible activities include experimental development, industrial research, and basic research, provided they address technical uncertainties.

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♪ Research grant for [software development](/services/software development): A Guide to Businesses

Continuous research and development (F&E) are key to success in the dynamic world of information technology.

Innovative software solutions not only ensure competitiveness, but also drive digital change.

However, especially for small and medium-sized enterprises (SMEs), the high cost of R&E projects is often a considerable obstacle.

At this point, the German Federal Government uses an attractive funding tool: the research grant. This article highlights how companies in software development can benefit from this tax promotion and what steps are necessary for successful application.

The innovations in force from 2026 will also be discussed, which further increase the attractiveness of the research grant.

What is the research supplement?

The one. In January 2020, research funding entered into force is a tax incentive for research and development activities of companies in Germany, regardless of their size or industry. The aim is to strengthen Germany's innovation location and encourage companies to invest more in R&E.

In contrast to project-based funding programmes, which are often associated with high administrative effort and uncertain prospects for success, the research grant is a legal claim.

This means that any company meeting the criteria has a right to support without having to compete with other applicants.

This planability and security make the research supplement a particularly valuable tool for the long-term R&D strategy of a company.

Which projects in software development are eligible?

Short: In principle, projects are eligible which can be assigned to the categories of basic research, industrial research or experimental development.

In principle, projects are eligible which can be assigned to the categories of basic research, industrial research or experimental development.

For software development, this means that not the routine further development or adaptation of existing software is promoted, but projects aimed at developing fundamentally new or significantly improved software.

The Research Supplement (BSFZ) certifying body responsible for examining the content criteria shall respect the novelty and the presence of technical risks.

It is therefore not a question of merely re-combining known technologies, but of entering new technical fields and of overcoming obstacles whose solution is not trivial.

Another important aspect is the planning of the project. The project must follow a clear goal and be structured in its individual phases.

Typical examples of eligible software projects are:

• Development of new algorithms and AI-based systems

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Method note: External statistics refer to published industry and official data (Bitkom, Destatis) where not otherwise attributed. Company-specific figures: Groenewold IT, 2026.

References and further reading

Short: The following independent references complement the topics in this article:

The following independent references complement the topics in this article:

• Bitkom – German digital industry association
• German Federal Office for Information Security (BSI)
• European Commission – Digital strategy
• MDN Web Docs (Mozilla)
• W3C – World Wide Web Consortium

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