• Changes in research and development subsidy system

Changes in research and development subsidy system

26 July 2023

Innovation is constantly rewriting the products and services that companies offer and the way they manage their business processes. As a consequence companies can no longer afford to neglect their R&D activities, otherwise they would be left behind in the highly competitive market.

In this publication Gyöngyi Szabó-Varga, Director of BDO Hungary's FDI Advisory points out the latest changes in the possibilities for companies to support R&D.


The Government’s aim is to increase the amount of R&D expenditures proportional to GDP from 1.65% (2021) to 3% by 2030. To reach that, the Government supports the Hungarian R&D ecosystem by ensuring different forms of subsidies to incentivize the undertaking’s R&D activities.

For several years, VIP cash subsidy for R&D projects based on individual Government’s decision has been continuously available, with the intensity ratio of 25%. The grant is available for undertakings employing more than 100 people on consolidated basis, who commit to establish at least 10 new R&D jobs. The subsidy can be awarded for projects covering 1-3 years, where the amount of eligible costs (personnel related expenditures, rental fee, depreciation, contracting research, other general and operating costs) reaches at least EUR 1 million.

Favorable changes have been made in the EU regulation effecting R&D subsidies in June 2023, which are expected to be implemented in the system of VIP cash grant for R&D projects in autumn this year. Thus, higher intensity ratios are expected to be applicable based on certain collaborative activities and/or the location of the project and   the settlement of general and other operating costs might be easier. If the Hungarian regulation follows the EU regulation, then for instance a project on experimental development performed outside of Budapest might be subsidized with 40% intensity ratio instead of 25%.

Besides the VIP cash grant for R&D projects, tender opportunities are expected to open soon based on the aim of the newly accepted innovation strategy (John von Neumann Program). According to that, the National Research, Development, and Innovation Fund ensures HUF 79 billion funding, in which the subsidized tenders will be professionally supported by the National Innovation Agency. Among the tenders, the most interesting for the competitive sector might be the tender named Supporting focus area innovation projects. In which the goal is to develop a marketable product, technology, or service through industrial cooperations, says Gyöngyi Szabó-Varga, Director of BDO Hungary's FDI Advisory Division.


BDO Hungary's FDI Advisory team can help you with the following important R&D tasks:

  • review corporate activities to identify research and development related projects,
  • support in identifying R&D related expenditures,
  • assistance in R&D qualification process,
  • advise on potential subsidy opportunities for R&D activities and their total project management.

If you need further specific information or advice adapted to your company's individual opportunities, please consult the BDO Hungary FDI Advisory team.