Tax Audit for the Research Premium: What Auditors Really Look For

In a Nutshell

• The research premium is a self-assessment tax credit - audits often occur years later
• Companies bear the burden of proof and must document project steps and costs thoroughly
• A positive FFG assessment is not a carte blanche - the tax office verifies actual implementation
• Clean time records, project attribution, and reconciliation with accounting are critical

The research premium is a key financial building block for many innovative companies in Austria. But there's an important thing to know: the premium is a self-assessment tax credit. The money is often credited first - the detailed review by the tax office typically follows years later as part of an external audit.

To make sure the 14% credit doesn't turn into a repayment, it's worth knowing the rules of the game for tax audits. Here are the key points auditors focus on:

1. The Enhanced Duty to Cooperate

Anyone claiming a tax benefit like the research premium bears the burden of proof. There is an enhanced duty to cooperate: it must be possible to clearly demonstrate and document why the premium is justified.

Practical tip: Don't wait for the auditor to ask. Document project steps and costs throughout the year as proactive evidence preservation.

2. The FFG Expert Opinion Is Not a Carte Blanche

Many companies rely on the fact that the FFG assessed their project positively. However, the FFG annual expert opinion is subject to the tax office's own assessment.

Important: The FFG only evaluates whether a project theoretically qualifies as research based on the submitted description. The tax office checks whether the research was actually carried out as described and whether the accounting figures match.

3. Focus on Personnel: Time Records

The largest portion of the premium usually falls on personnel costs. This is where auditors look most carefully.

• The requirement: Time records must include meaningful activity descriptions. "Project X: 8 hours" is not sufficient. The specific R&D activity must be identifiable - for example, "test series to optimise thermal conductivity".
• The distinction: Sales or purely administrative time must be consistently excluded.

4. Direct Expenditures: Project Attribution

Every euro claimed for materials, licences, or travel must be directly attributable to the R&D project.

Audit checklist:

• Were material costs taken from inventory? Proof of inventory valuation method (e.g. FIFO) is required.
• Were investments (e.g. laboratory equipment) consistently used for R&D?
• Are travel costs directly attributable to an R&D milestone?

5. Reconciliation with Accounting

A common mistake: the figures in the R&D register don't match the figures in the balance sheet or profit and loss statement.

Tip: A reconciliation statement helps. It must be possible to explain at any time how the premium-eligible costs were derived from total costs in the accounting records. Imputed costs (such as imputed rent) must be excluded.

Conclusion

A tax audit for the research premium is no cause for concern if the homework has been done. Those who record systematically, clearly separate R&D from sales activities, and can present complete documentation will keep the 14% permanently.

Apply for the Research Premium with StartMatch

The research premium is one of Austria's most attractive funding instruments. StartMatch supports companies throughout the entire application process: from identifying eligible projects to creating compliant application texts and calculating the assessment base.

Claim back your R&D expenses from the last four years - quickly, stress-free, and with professional support. Book a free consultation.