Planned innovation incentives for Lucerne-based companies

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• Planned new innovation support instrument in the Canton of Lucerne (LIG), subject to popular referendum on 27 September 2026.
• Broad-based innovation support, including R&D, clinical studies and innovation-related functions.
• Funding contributions of up to 50%; first applications expected from 2027.

Executive Summary

The Canton of Lucerne is planning to introduce a new innovation promotion contribution (the Lucerne Innovation Grant “LIG”) to strengthen its attractiveness as an innovation and business location. On condition that the popular referendum of 27 September 2026 be approved, companies engaged in research, development and innovation activities may benefit from funding contributions of up to 50% of qualifying expenditures.

Given the requirements relating to governance and documentation, an early assessment of eligibility and structured preparation are recommended for eligible companies.

The Canton of Lucerne is planning to introduce a new Innovation Promotion Contribution (Lucerne Innovation Grant “LIG”) as part of its location promotion program. The instrument is intended to strengthen Lucerne’s attractiveness as an innovation and business location and to provide targeted financial support to companies with qualifying research, development and innovation activities.

The entry into force of the LIG is currently scheduled for the fourth quarter of 2026 and is subject to political approval (public referendum on 27 September 2026). If the bill is approved, companies will be able to apply for funding contributions for innovation-related expenditures.

The LIG program is open to all sectors and companies of all sizes, including service providers, start-ups and group-affiliated entities, provided that they have an actual economic presence in the Canton of Lucerne.

Scope of funding: Innovation in a broad sense

The Lucerne Innovation Grant focuses on promoting innovation in a comprehensive sense. Unlike traditional R&D funding instruments, the LIG is not limited to pure research activities but covers a broad range of innovation-related activities.

Qualifying activities:

• Basic research
• Industrial research
• Experimental development
• Product, service and process innovations
• Clinical studies
• Innovation-enabling management and support functions, e.g., IP management, regulation, IT, HR and finance, provided they are directly linked to innovation activities eligible for funding.

The funding scheme follows a substance-based approach. What matters is that the relevant activities and risks are organizationally anchored within the applicant company and are appropriately documented.

Qualifying costs and calculation of the funding

The LIG is calculated based on the company’s qualifying expenses in the areas of research, development and innovation.

Qualifying costs are:

• Staff expenditure
• Investment costs (e.g., amortization on intangible assets)
• R&D contracts
• Other expenditures (e.g., clinical studies, consumables, certain IP-related third-party services, as well as qualifying management functions)

The maximum funding contribution amounts to up to 50% of the eligible expenditures, as stipulated by law. The specific contribution rates per cost category will be determined by the Canton of Lucerne at a later stage.

Double funding is avoided: tax-based innovation incentives (e.g., additional R&D deduction, patent box regime) as well as other financial aid are deducted when calculating the LIG.

Basic conditions and deadlines (planned)

The key points currently planned can be summarized as follows:

Planned cantonal budget:

• CHF 110 million p.a. for 2026
• CHF 160 million p.a. for 2027 and beyond

Application basis:

Assessment based on the financial year two years prior to the application year.

First filing deadline:

Contribution year 2026: by 31 January 2027 (based on FY 2024 data).

2027 and beyond:

Applications must be submitted by 31 January of the respective contribution year (e.g., 31 January 2028 based on the 2026 financial year).

Forms of funding

• Subsidy (direct cash payment)
• Qualifying Refundable Tax Credit (QRTC)
• Non-Refundable Tax Credit (NRTC)

The granting of the LIG is subject to application and requires, in particular, a duly audited annual financial statement, evidence of sustainable business practices and clear, verifiable documentation of the eligible activities and expenditures.

Context and support provided by EY

If the Lucerne Innovation Grant is introduced as planned, it may offer significant financial benefits for innovation-oriented companies. Due to the high requirements regarding delineation, documentation and governance, an early assessment of eligibility is recommended.

EY experts are happy to support you with the: 

• assessment of the planned LIG and its implications;
• identification of eligible activities and expenditures;
• selection of the appropriate form of funding;
• structured preparation of applications and documentation.

Our experts from EY’s Central Switzerland Tax team would be pleased to support you in this matter.