Can I claim R&D conducted overseas?

There are specific rules surrounding the inclusions and exclusions of overseas R&D expenditure related to a company’s R&D tax claim. To claim overseas expenditure, a company must first seek approval by submitting an Overseas Finding Application before year end.

R&D activities conducted overseas can only be eligible for the R&D Tax Incentive where:

• The activity to be conducted overseas has a ‘significant scientific link’ to core R&D activities conducted in Australia.
• The expenditure on overseas activities is less than expenditure on Australian Core and Supporting Activities.
• The overseas activity cannot be conducted within Australia for reasons including:

• within Australia would contravene a law relating to quarantine
• requires access to a facilities, expertise or equipment not readily available in Australia.Companies are expected to determine the level of expertise available. This includes conducting a reasonable Australia-wide search or advertising campaign or through seeking advice from independent experts. A lack of proven experience in a field may be sufficient to show that the expertise is unavailable. The guidance recognises that being unable to gain access to facilities or equipment in a reasonable time frame may constitute sufficient grounds for conducting research overseas. The guidance also records that gaining access to facilities only at significantly above Australian market rates may also support a case of unavailability in Australia.
• requires access to a population (of living things) not available in Australia. The guidance notes that, in some non-contentious cases, companies can explain in their applications that there isn’t a sufficient population in Australia to meet the requirements of the relevant activity. In other scenarios, AusIndustry would expect companies to conduct a reasonable investigation within Australia to locate a suitable population and provide evidence of how the search was conducted.
• requires access to geographical or geological features not present in Australia

Think your company may be eligible for the R&D Tax Incentive?

There are a number of different types of businesses that can claim the R&D tax credit, including software developers, tech companies, biotechnology companies, mining and engineering companies, companies from the agricultural sector and many more.

Are you interested in how TaxTax Software can assist in preparing your claim? Or, are you simply looking for more information about the R&D Tax Incentive? If so, please Contact Us.

Track your projects in real time

TaxTrex’s three annual surveys provide an up to date and verifiable overview of your research progress. Each survey is time-samped digitally, which will help you defend your claim in the event of an audit. Learn more

Risk assessment

Our innovative risk assessment algorithm will identify any potential issues with your R&D project. If a compliance risk is identified, our team will work with you to ensure your claim accurately meets AusIndustry’s requirements.Learn more

Real-time reports

TaxTrex surveys are digitally time-stamped to ensure the scientific process is recorded as it occurs. This unique feature acts as a proof of your research progress, and will help defend your claim in an audit.Learn more

Document storage

TaxTrex’s unique document storage facility provides a central location where all your R&D documents can be saved. If you are audited, you can simply access this facility and download all your supporting documents.Learn more