Eligible and Ineligible Costs

It is important that the budget and reporting template only include eligible costs. Ineligible costs listed in the budget or accounts will be rejected by the European Commission during project reporting.

If the project has incurred more eligible expenses than budgeted, we recommend that you also report these expenses. They can potentially replace costs rejected by the European Commission.

General Conditions for Eligibility

All types of costs must comply with certain conditions to be eligible. The following seven conditions apply:

1. Costs must be incurred by your organization as the (beneficiary, meaning the same VAT number (CVR-number) is used.
2. Costs must be incurred within the project period.
3. Costs must be included in the project's budget.
4. Costs must be incurred in connection with the activities described in the project description and necessary for the implementation of the project.
5. Costs must be identifiable, verifiable, and recorded in your organization’s accounting system in line with your standard accounting practices.
6. Costs must comply with current legislation regarding tax, employment, and social contributions.
7. Costs must be reasonable, justified, and aligned with the principle of sound financial management, particularly concerning economy and efficiency.

Fixed Rate

In special cases and within certain budget categories, costs can be budgeted and subsequently reported as unit costs. These are primarily calculated by multiplying the number of units (e.g., hours worked or access instances to infrastructures) by a fixed amount. The value per unit and reporting procedure are defined in the grant agreement.

A fixed rate is an amount automatically triggered by certain direct costs in the project. An example is indirect costs, calculated by adding 25% to the sum of direct costs minus subcontracting.

Ineligible Costs

Ineligible costs include:

• Interest expenses
• Currency losses
• Redundant expenses
• Bank charges
• Refundable VAT.