R&D tax credits for startups in 2026: which countries pay cash to loss-making companies
Short answer: R&D tax credits are the largest source of non-dilutive money for most technical startups, but they are not cash up front: you spend first and recover part of the cost after you claim. The schemes that pay a loss-making startup in cash are the most useful early. Canada's SR&ED gives eligible CCPCs a 35% refundable credit, Australia's R&D Tax Incentive refunds company tax rate plus 18.5 percentage points for companies under A$20M turnover, Germany's Forschungszulage pays 35% of eligible costs for SMEs even when you make a loss, and Norway's SkatteFUNN pays out its 19% deduction as cash if it exceeds tax due. The Dutch WBSO works through payroll tax instead, with a 50% starter rate.
The Grant Index tracks R&D tax schemes alongside grants because for many founders they are worth more than any single grant call. Each scheme below is checked against its official government page (the date is in the "Verified" column). Tax rules have conditions this guide cannot cover fully, so treat it as a map and confirm details with the tax authority or an adviser before you rely on a number.
1. Tax credit, not grant: what that means in practice
A grant pays you before or during a project. A tax credit reduces your tax bill, or, if it is refundable or payable, sends you cash after you file. For a startup that matters in three ways. First, you need to fund the R&D yourself for up to a year or more before the claim pays out. Second, a non-refundable credit is worth little until you are profitable, so refundability is the key question. Third, evidence matters: nearly every scheme asks you to show technical uncertainty and systematic work, so keep project records as you go rather than reconstructing them at year end.
2. The schemes compared
| Program | What you get | Who qualifies | Verified |
|---|---|---|---|
| UK R&D Tax Relief (Merged Scheme & ERIS)HM Revenue & Customs | Merged RDEC: 20% taxable credit on qualifying R&D. ERIS (loss-making R&D-intensive SMEs): 186% total deduction plus payable credit up to 14.5% of surrenderable loss | UK companies chargeable to Corporation Tax. Merged scheme: 20% taxable credit. ERIS for loss-making SMEs whose R&D is at least 30% of total spend: 186% deduction plus payable credit up to 14.5% of surrenderable loss. Some companies must notify HMRC in advance. | 2026-11-08 |
| SR&ED Tax IncentiveCanada Revenue Agency | Investment tax credit of 15% (basic) or 35% enhanced, refundable rate for CCPCs and eligible Canadian public corporations on up to C$6M of qualifying expenditure per year (limit phases out at C$15M–75M taxable capital); plus deduction of R&D spend. Amount depends on spend. | Work done in Canada meeting the SR&ED definition. 15% basic credit; 35% enhanced, refundable for CCPCs and eligible Canadian public corporations on up to C$6M of spend a year. Claim on Form T661 with the corporate return; optional pre-claim approval. | 2026-11-08 |
| Ontario Innovation Tax Credit (OITC)Ontario Ministry of Finance / Canada Revenue Agency | 8% refundable tax credit on qualified SR&ED expenditures incurred in Ontario, up to a C$3M annual expenditure limit (limit phases out with taxable income and capital) | Corporations with a permanent establishment doing SR&ED in Ontario and claiming federal SR&ED. 8% refundable on qualified Ontario spend, up to a C$3M expenditure limit. Schedule 566. | 2026-11-08 |
| Australian R&D Tax IncentiveDepartment of Industry, Science and Resources / ATO | Refundable tax offset of company tax rate + 18.5 percentage points for companies with aggregated turnover under A$20M; non-refundable offset of tax rate + 8.5pp (R&D intensity ≤2%) / +16.5pp (>2%) for larger companies | Australian-incorporated companies. Refundable offset of tax rate + 18.5 points under A$20M aggregated turnover. Minimum A$20,000 eligible spend (unless via a Research Service Provider). Register activities within 10 months of income-year end. | 2026-11-08 |
| Forschungszulage (German R&D Tax Allowance)Bescheinigungsstelle Forschungszulage / German tax authorities | Allowance of 25% of eligible R&D costs (35% for SMEs); maximum assessment base €12M per year for costs from 1 Jan 2026 (max ~€3M/yr, €4.2M for SMEs); contract research counted at 70%; paid out even if loss-making | Any company taxable in Germany, any size or sector. 25% of eligible R&D costs (35% for SMEs) on an assessment base up to EUR 12M a year from 2026; contract research counts at 70%. BSFZ certifies the project first, then claim at the tax office. | 2026-11-08 |
| WBSO (Dutch R&D Tax Credit)Netherlands Enterprise Agency (RVO) | 2026: 36% of R&D wage/cost base up to €391,020 (50% for starters), 16% above; self-employed deduction €15,979 + €7,996 starter top-up | Dutch employers (or self-employed). 2026: 36% of the R&D wage/cost base up to EUR 391,020 (50% for starters), 16% above. Paid as reduced payroll tax. Apply before the R&D period starts, up to 4 times a year. | 2026-11-08 |
| SkatteFUNN R&D Tax IncentiveResearch Council of Norway | Tax deduction of 19% of eligible R&D project costs, on up to NOK 25 million of costs per company per year (paid out as cash if exceeding tax due) | Companies registered in Norway and taxable there. 19% deduction on up to NOK 25M of approved project costs a year, paid out if it exceeds tax due. Research Council approves the project; apply by 1 September for the current year under 2026 rules. | 2026-11-08 |
| New Zealand R&D Tax Incentive (RDTI)Inland Revenue (with MBIE) | 15% tax credit on eligible R&D spend (minimum NZ$50,000/yr, max NZ$120M) | Businesses doing eligible R&D in New Zealand with at least NZ$50,000 of eligible spend a year. 15% tax credit. Register, then get approval by the due date and file a supplementary return. Refundability depends on eligibility rules. | 2026-11-08 |
3. Schemes that put cash in a loss-making startup's account
Canada (SR&ED, plus Ontario). For eligible Canadian-controlled private corporations, the enhanced 35% credit is refundable, which is why SR&ED is the backbone of early Canadian funding. Ontario companies add the 8% refundable OITC on the same work. Our Canada guide covers how these stack with IRAP.
Australia (R&DTI). Small companies with aggregated turnover under A$20M get a refundable offset, so a pre-revenue startup can receive cash. The trap is timing: you must register the year's R&D activities within 10 months of the end of the income year, before you claim with the ATO. Announced changes from the 2026-27 Budget apply only from 1 July 2028.
Germany (Forschungszulage). Every German-taxed company has a legal entitlement, and the allowance is paid even if you are loss-making. It is a two-step process: the BSFZ certifies that the project is R&D, then you claim at the tax office. The 2026 increase of the assessment base to EUR 12M matters more to larger firms; for startups the 35% SME rate is the headline. For projects started after 31 December 2025, a 20% flat-rate add-on for overheads and other operating costs is now included in the base, which lifts the effective value for small teams. See our Germany guide for grants that pair with it.
Norway (SkatteFUNN). The 19% deduction is paid out as cash if it is larger than the tax you owe. Under the 2026 rules, applying before 1 September guarantees processing for the current year. A 2027 budget proposal, not yet adopted, would share the cap across a group, limit the deduction to costs after approval and remove the 1 September guarantee, so apply early.
United Kingdom (ERIS). Loss-making, R&D-intensive SMEs can surrender losses for a payable credit. If your R&D spend is below 30% of total spend, you are in the merged scheme instead, which gives a 20% taxable credit. Our UK guide covers Innovate UK grants that run alongside it.
4. The payroll route: Netherlands WBSO
WBSO is different: you do not wait for a tax return. Once approved, you reduce the wage tax you pay on R&D staff. That means you need employees on payroll (self-employed founders get an income-tax deduction instead), and it means you must apply before the R&D period starts, for example by 20 December for a period starting 1 January. Starters get 50% on the first bracket instead of 36%. After the year you report the R&D hours you actually worked.
For 2027: RVO is already taking WBSO applications for periods starting 1 January 2027. Employers must file by 20 December 2026; self-employed founders can still file on 1 January itself. The 2027 tax plan leaves the rates and the EUR 391,020 first-bracket limit unchanged, and the flat hourly R&D wage for companies without their own wage history rises from EUR 29 to EUR 33. Parameters become final only once the Dutch Senate approves the tax plan.
5. New Zealand: approval before the claim
New Zealand's RDTI gives a 15% credit but needs at least NZ$50,000 of eligible R&D a year, which rules out very early teams. You register, then obtain general approval (or criteria and methodologies approval) by the due date, and only then file the R&D supplementary return. Whether the credit is refundable depends on separate eligibility rules, so check before counting on cash.
6. Rules that lose R&D tax claims
- Missing a pre-approval deadline. WBSO must be filed before the period starts (20 December 2026 for a 1 January 2027 start), SkatteFUNN before 1 September for guaranteed processing, Australia registration within 10 months of year end, and some UK companies must notify HMRC in advance.
- Calling routine development R&D. All schemes require a technical or scientific advance with real uncertainty. Building a standard app with known methods usually does not qualify.
- No contemporaneous records. Keep time logs, test results and decision notes. Reconstructing a year of work afterwards is where claims fail review.
- Ignoring grant interaction. Grants received for the same costs can reduce or change your tax claim in several countries. Disclose all public funding.
- Overseas costs. UK, Canadian and other schemes restrict work done abroad. Keep R&D in the country that funds it.
FAQ
Are R&D tax credits available to startups with no revenue?
Yes, in countries where the credit is refundable or payable. Canada (SR&ED for eligible CCPCs), Australia (under A$20M turnover), Germany (Forschungszulage), Norway (SkatteFUNN) and the UK (ERIS for loss-making R&D-intensive SMEs) can pay cash to a company that pays no tax.
Is an R&D tax credit a grant?
No. It is a reduction in tax, or a cash refund after you file, based on R&D you have already paid for. You need to fund the work first, unlike a grant that pays during the project.
What is the WBSO starter rate in 2026?
50% on the first bracket of the R&D wage and cost base (up to EUR 391,020) for eligible starters, instead of the standard 36%, with 16% above that bracket. It is taken as a reduction in payroll tax.
How much is the German R&D tax allowance for SMEs?
35% of eligible R&D costs for SMEs (25% for larger companies), on an assessment base up to EUR 12M a year for costs from 1 January 2026. Contract research counts at 70%. It is paid out even if you make a loss.
What is the minimum spend for R&D tax incentives in Australia and New Zealand?
Australia requires at least A$20,000 of eligible R&D expenditure (unless done through a Research Service Provider). New Zealand requires at least NZ$50,000 a year.
Can I claim an R&D tax credit and a grant for the same project?
Often yes, but grants for the same costs can reduce what you can claim or change which scheme applies. Disclose all public funding in both applications.
Program terms change often. Every program page linked above shows its official source and the date we last verified it; confirm on the provider's page before you apply. Spotted something out of date? Report a correction.
Related guides
Browse the full lists: Government grants for startups · Startup programs in Canada · Startup programs in the United Kingdom · Startup programs in Germany