The Austrian research premium is an important, non-discretionary tax instrument designed to stimulate research and development (R&D) and promote a knowledge-based economy [cite: 1]. [cite_start]Unlike a traditional tax deduction, this premium is a direct, cash-like credit calculated at 14% of eligible R&D expenditure [cite: 1]. The premium is fully refundable and credited to a company's tax account, making it particularly attractive for both profitable and loss-making companies.
The administration of the research premium is managed through a two-track system that establishes a clear division of tasks and expertise. [cite_start]The Austrian Research Promotion Agency (FFG) is responsible for preparing a mandatory, free expert opinion (report) that assesses the technical eligibility of a company's R&D activities for funding[cite: 1]. However, the final decision on granting the premium rests with the tax office, which fully examines both the technical and financial aspects of the claim.
The fundamental set of rules for defining eligible R&D activities in Austria is the internationally recognized OECD Frascati Manual. This manual defines R&D as a creative and systematic process that aims to solve a scientific or technological uncertainty in order to generate new knowledge. The focus is on the research process itself and not on the ultimate success of the project, which means that even failed projects are eligible for the grant.
A key finding is that a successful claim for the research premium depends on a carefully documented, proactive approach. Companies must align their internal R&D processes and records with the technical definitions in the Frascati Handbook to obtain a positive expert opinion from the FFG (Austrian Research Promotion Agency). Although not legally binding, a positive opinion is the de facto prerequisite for tax authorities to approve a claim.