State-funded research institutes in Germany have been thrown into turmoil by a tax ruling that could require them to register as private companies, and severely limit their access to public funds. The ruling was made by a federal taxation court in Munich, which decided that the DLR (Deutsche Forschungsanstalt fuer Luft-und Raumfahrt), the national research centre for air and space research, must pay value added tax (VAT) on industrial research contracts at the full 15 per cent rate applicable to commercial companies. Organizations, including publicly funded research institutes, that do not make a 'profit' on the research they do, pay only 7 per cent.
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