Research & Development Tax Incentive

Do you undertake research and development (R&D) activities in your business? Are you accessing the R&D Tax Incentive program, made available by the Australian Federal Government?

The current R&D program was introduced in 2011 but there are still many companies not accessing the program, in not doing so missing out on claiming tax offsets and/or cash rebates.

The R&D incentive program has been designed to encourage companies to invest in R&D to boost competitiveness and improve productivity. It is a self-assessment program: if you are eligible, you are entitled to claim.

Who can claim for the R&D Tax Incentive?

• Are you a body corporate that is incorporated under Australian Law?
• Are you a foreign company that is a resident in Australia?
• Are you a foreign company with a permanent establishment in Australia?

What can you claim?

• The research and development tax incentive is about generating new knowledge through experimental development
• Eligible R&D activities include core and supporting activities
• Eligible expenditure includes salary/wages, contractor costs, trial expenditure, direct expenditure such as raw materials, and depreciation on plant and equipment

What is the benefit?

• A 43.5% tax offset (claimable as a cash refund and/or tax credit depending on the entity’s income tax position) for eligible entities with an annual turnover less than $20 million. 
• For all other entities a non-refundable tax offset, the rate subject to the entity’s R&D expenditure relative to total expenditure (R&D intensity).  An R&D intensity up to 2% yields a tax offset equal to the entity tax rate plus 8.5%.  Any amount in excess of 2% R&D intensity is claimable at the rate of 16.5%.

How to apply:

• Registration is an annual requirement
• Applications for R&D must be lodged with AusIndustry within 10 months your company’s financial year-end
• The benefit is claimed through the Company Income Tax Return

Contact Incentive Advisory today on 1300 462 238, our R&D Tax Incentive advisors will navigate you through the eligibility and application process.