In this article, we will discuss the newly launched German R&D tax credit program, which is part of local government strategy to boost innovation in drug development and support R&D activities in the private sector. First, a bit of information about Precision for Medicine (PFM). We are more than just a Contract Research Organization and have a comprehensive suite of capabilities to support the spectrum of biopharmaceutical companies’ needs across the drug development lifecycle. We are excited to share later on in this article what services we can provide locally in Germany, which will help Sponsors (Biotech and Pharma) take advantage of the German R&D tax credit program.
Disclaimer: PFM prepared this article for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors before engaging in any DE tax credit applications.
Now, let’s dive back into the information we have to share. DE Biopharma companies are considered a critical hub of innovative drug development and the recent German Act on Tax Incentives for Research and Development, also referred as to the Forschungszulagengesetz (FZulG), aims to establish, and strengthen Germany as a preferred location for innovation as well as technology hot spot. Importantly, R&D expenses can be claimed on activities performed throughout the drug development process hence the FZulg may result in material tax savings for both German small and medium-sized enterprises/start-up businesses and international corporate groups.
Under this act, applicable from 1 January 2020, entitled companies subjected to tax liability in Germany and generating profit income have the opportunity to apply for R&D subsidies of up to 25% of their eligible expenses (maximum amount of subsidy of EUR 1,000,000 year until 30 June 2026). Importantly, guidance on how the process works and claimant assistance to accurately select eligible activities and their associated costs exists on the German ministry of Finance website (here). Particularly, a two-step process for application and award of the R&D allowance is necessary:
If your R&D entity is paying taxes in Germany and you want to initiate an R&D tax credit application, we encourage you to learn more about this here on their website.
“As a leading DE CRO, Precision for Medicine is exceptionally positioned to support our DE BioPharma companies, allowing them to benefit from advantageous local R&D incentives”
— Andrea Cotton-Berry, Global Head, Strategic Development US, EU, APAC
Providing customized CRO solutions from late pre-clinical stage all the way through post-launch clinical trials, Precision for Medicine offers a unique partnership to promote innovation in Germany, prioritizing R&D activity development locally and maintaining close collaboration with DE R&D centers of excellence. Below is a list of available services based out of the DE.
| DE-based Laboratory Services | DE-based Clinical Trial Services |
|---|---|
| Learn more > | Learn more > |
For innovative BioPharma companies where you want to tap into DE R&D tax credits, it’s also critical to work with a partner with services and staff in DE. This is where PFM can support your drug development innovation. To learn how Precision can support your efforts, please contact our team here.
Estelle Roger is a senior program manager at Precision Medicine Group and supports strategies related to public funding of research and innovation. With more than 5 years building and managing R&D Tax incentives strategies for both CROs and pharmaceutical industries, Estelle’s expertise covers a meaningful panel of R&D tax relief regimes across North America and Europe.
Precision for Medicine is part of the Precision Medicine Group, an integrated team of experts that extends Precision for Medicine’s therapeutic development capabilities beyond approval and into launch strategies, marketing communication, and payer insights. As one company, the Precision Medicine Group helps pharmaceutical and life-sciences clients conquer product development and commercialization challenges in a rapidly evolving environment.
