Secure Your R&D Tax Credit Successfully: Why Tax Advisors Often Struggle

Challenges and Solutions for Businesses Applying for the R&D Tax Credit

When it comes to discussions around the Growth Opportunities Act (DE: Wachstumschancengesetz) or more specifically, the R&D tax credit, the first point of contact is often a trusted tax advisory firm. However, experience has shown that traditional tax advisors usually lack significant expertise in R&D funding and often refer these tasks to specialized funding consultants.

Why Funding Consultants Are Often Indispensable for the R&D Tax Credit

The R&D tax credit is an interdisciplinary undertaking, posing bureaucratic, commercial, and technical challenges that require expert knowledge. Many business owners are hesitant to apply for the R&D tax credit independently, as it involves significant time, expertise, and bureaucracy. Companies attempting to apply on their own can quickly accumulate up to 20 person-days of effort, including thematic preparation, without any guarantee that the applications will be submitted and approved correctly.

A typical R&D tax credit team should consist of a commercial expert, a tax professional, and a technical employee with R&D funding experience. Additionally, all relevant project managers must contribute content to the R&D tax credit team and have their working hours recorded electronically in retrospect. Otherwise, documentation becomes even more complicated, increasing the risk of making errors.

Audit Security and the Role of the BSFZ and the Tax Office

Ensuring audit security is crucial. In the context of the R&D tax credit, the Certification Office for R&D (BSFZ) may order technical project audits, or the tax office may conduct commercial audits. If documentation is not properly maintained or if due diligence is not observed, this can lead to uncomfortable repayment requests years later. Traditional tax advisory firms often lack the necessary expertise in such cases and refer clients to specialized funding consultants for defense in audit situations.

Efficient Application Submission with Experienced Funding Consultants

Given the required expertise, effort, and risk of failure, many business owners opt for a competent funding consultant when applying for the R&D tax credit. With professional help, companies can reduce their internal effort to a maximum of 3 person-days and often have a success guarantee included in the service contract, protecting them from inconvenient fee demands.

We recommend partnering with an experienced funding consultant for the R&D tax credit or other funding programs to streamline the application process, maximize returns, and safeguard against uncomfortable audits by the BSFZ or tax office.