The Grant Agreement (GA) contains detailed provisions about the eligibility of costs in Horizon Europe. It specifies the criteria for all eligible costs and defines special requirements for the individual cost categories. It is wise to familiarise yourself with these rules at an early stage in order to avoid errors and mistakes in reporting.
The costs must be broken down according to the following standard budget categories during budgeting in the proposal and at the end of each reporting period:
- Personnel costs (Factsheet about the daily rate for SME owners and natural persons (as beneficiaries) without a salary see below "More information")
- Subcontracting
- Purchase costs: travel costs, equipment, other goods, works and services
- Indirect costs
Reporting is usually based on actual costs in line with the following requirements:
All actual costs must …
- be actually incurred by the beneficiary (no estimated/imputed/budgeted costs),
- be incurred in the project period (exception: costs of final report submitted within 60 days of the end of the project),
- be included in the budget (indicated in the estimated budget of the Grant Agreement; for more information see budget transfers),
- be incurred in connection with the action and necessary for its implementation (according to the Description of the Action of the Grant Agreement),
- be identifiable and verifiable and recorded in the beneficiary’s accounts in accordance with the applicable accounting standards and usual cost accounting practices,
- comply with the applicable national laws on taxes, labour and social security, and
- be reasonable and justified and comply with the principle of sound financial management (in particular regarding economy and efficiency).
Among others, the following costs are not eligible:
- interest owed
- currency exchange losses
- bank charges for transfers from the EU Commission
- deductible VAT (Please note: Non-deductible VAT is eligible if the beneficiary is not entitled to deduct input tax.)
In certain cases defined in the Grant Agreement costs may also be declared as so-called unit costs. Evidence must be provided that the “units” are related to the project, necessary for implementing the project and used in the project period (exception: costs of final report submitted within 60 days of the end of the project).
Indirect costs are reimbursed at a flat rate in Horizon Europe. No documentary evidence is necessary.
If defined in the Grant Agreement, costs may be reported as so-called lump sums. Provided that the costs have been included in the budget (indicated in the estimated budget of the Grant Agreement), have been incurred in connection with the action and necessary for its implementation (according to the Description of the Action of the Grant Agreement) and the deliverables have been fully achieved in the agreed period (exception: costs of final report submitted within 60 days of the end of the project).
The funding per project may never exceed the maximum grant amount specified in the Grant Agreement.
If the requested EU contribution to costs of a beneficiary (incl. the 25% flat-rate for indirect costs) reaches or exceeds a specific value (430,000 euros) a Certificate on the Financial Statements (CFS) issued by a qualified auditor must be submitted together with the final report.
Profit-oriented beneficiaries have to state eventual revenues of the project in the proposal as well as at reporting. A no-profit rule normally applies in Horizon Europe. Revenues are all income generated by the action during its duration. Please note: revenues may lead to a grant reduction at project level.
More information can be found ...
- in the Annotated Grant Agreement (AGA), article 6 & Data Sheet Point 3 + Point 4.3 (CFS)
- in our infosheet "Förderfähigkeit der Mehrwertsteuer in Horizon Europe" (in German only)
- in our Online-Infopackage "Dritte in Horizon Europe" (in German only)
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