19.07.2022 | KPMG Law Insights

Research & Development – The R&D Framework and its 20% Clause

The article provides an introduction on the design and main features of the 20% clause of the R&D framework as an exception to the prohibition of state aid in Art. 107 TFEU. It may be particularly worthwhile for universities and research institutions to address the requirements of the 20% clause.


In the 20% clause, there is an exception to the prohibition of state aid in Art. 107 TFEU. It is part of the R&D Framework (the current Union framework for state aid to research, development and innovation) and, with its design for research institutions, creates a further exemption constellation within which the Commission does not assume aid within the meaning of Article 107 TFEU. The requirements that must be met by research institutions in order to be able to legitimately invoke the 20% clause, and the challenges and as yet unresolved questions of a legal and factual nature associated with the application of the 20% clause, are the subject of this article, which provides a brief overview and outlook on the topic.


The scope and design of the 20% clause:

The 20% clause applies to state research institutions that, in addition to their non-economic activities (primarily teaching and research), also engage in economic activities to a certain extent. In this regard, economic activities are those activities through which the entity regenerates financial resources and profits. Only if these economic activities are to be classified as ancillary activities does the 20% clause apply and they are not subject to state aid law. The requirements for the application of the 20% clause and the classification of the economic activity as purely ancillary are defined by the Commission in legally binding criteria. The economic activities must be ancillary activities of the research institution. The nature of the economic activities can vary; various fields of activity are conceivable: for example, offering continuing education events, contract research work by private individuals, lending laboratory equipment or, for example, preparing expert reports.

An economic activity may constitute an ancillary activity if it does not exceed a share of 20% with respect to the total capacity of all activities of the entity and the nature of the economic activity is inseparable from and necessary for the non-economic activity. In addition, no new infrastructural resources may be required for the execution of the economic activities. This means that the same materials, personnel and premises must be used for both economic and non-economic activities. Accordingly, purchases intended solely to carry out economic activities are not permitted and are subject to the law on state aid.

In order for the economic activity to be classified as a secondary activity, some documentation is required by the research institution relying on it. Within a separation statement, it must be shown which activities are of an economic nature and which activities are of a non-economic nature. The separation calculation is then also considered as proof that the limit of 20% of the total capacity of the facility has not been exceeded. The same applies to the use of the infrastructure: it must be evident from the documentation that there has been a predominant use for non-economic activities.

Despite the EU Commission’s statements in the R&D framework on the 20% clause, there are still some legal uncertainties concerning the provisions of the circumstances and framework conditions. In particular, the requirement with respect to the overall capacity of the facility is unclear and has not yet been clarified by either decisions or the judiciary. The determination of the 20% of the total capacity can refer either to the research institution as a single unit or to different thematically structured subunits, for example individual faculties or research groups. A clear interpretation of the concept of unity has yet to be made, and thus uncertainty remains with regard to the reference value.


Outlook and reality check:

So far, the 20% clause of the R&D framework has proven to be more of a “paper tiger” whose concrete application still entails uncertainties. Although basic requirements and criteria are defined by the R&D framework, there is a lack of clarification of other requirements that would increase the likelihood of success of an invocation of the clause. It therefore remains to be seen whether last year’s announcement that the EU Commission would comment on the issues and come up with resolutions to remedy the legal uncertainties will be fulfilled. Once these uncertainties have been finally clarified, however, the exception offers research institutions another practical way of using public funds in a way that complies with state aid rules.

This article is part of the newsletter “Querschnitt Wissenschaft”, which you can subscribe to here.

Explore #more

13.06.2024 | Press releases

Handelsblatt and Best Lawyers honor KPMG Law Experts

Best Lawyers has once again identified the best commercial lawyers in Germany for 2024 exclusively for Handelsblatt. A total of 28 lawyers were honored by…

27.05.2024 | KPMG Law Insights

Agreement on ecodesign regulation: products to become more sustainable

After lengthy negotiations, the Council and Parliament of the European Union reached a provisional agreement on the Ecodesign Regulation on the night of December 5,…

22.05.2024 | KPMG Law Insights

The AI Act is coming: EU wants to get a grip on AI risks

For many people, artificial intelligence (AI) is the great hope for business, healthcare and science. But there are also plenty of critics who fear the…

17.05.2024 | KPMG Law Insights

Podcast series “KPMG Law on air”: When the family business is to be sold

Around 38,000 family businesses are currently handed over each year. In most cases, the change of ownership takes place within the family. But more and…

03.05.2024 | KPMG Law Insights

Doubts about inability to work? What employers can do

The certificate of incapacity for work (AU certificate) serves as proof of incapacity for work due to illness. However, only if the certificate meets certain…

27.03.2024 | KPMG Law Insights

EU Buildings Directive: life cycle greenhouse potential becomes relevant

On March 12, 2024, the EU Parliament approved the amendment to the EU Buildings Directive. The directive obliges member states and, indirectly, building owners and…

19.03.2024 | Business Performance & Resilience, KPMG Law Insights

CSDDD: Provisional agreement on the EU Supply Chain Directive

The EU member states agreed on the CSDDD, the EU Supply Chain Directive, on March 15, 2024. Germany abstained from the vote. Negotiators from the…

21.02.2024 | KPMG Law Insights, KPMG Law Insights

The Digital Services Act – what does it mean for companies?

The Digital Services Act (DSA) is a key component of the EU’s digital strategy and came into force on November 16, 2022. As a regulation,…

15.02.2024 | KPMG Law Insights

Data compliance management: How to implement it in practice

Part 3 of the article series “Professional tips for data compliance management”   The third part of this series of articles deals with data compliance

14.02.2024 | Business Performance & Resilience, PR Publications

Guest article in ZURe: Monitoring the implementation of the LkSG

The current issue of ZURe (p. 20 ff.) contains a guest article by KPMG Law Partner Thomas Uhlig (Head of General Business and Commercial Law),…


Dr. Jannike Ehlers

Senior Associate

Fuhlentwiete 5
20355 Hamburg

tel: +49 (0)40 360994-5021

Private: Kristina Knauber

Senior Manager

Barbarossaplatz 1a
50674 Köln

tel: +49 221 271 689 1498

© 2024 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit

 KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.