R&D Tax Incentive – FAQ

Yes, to claim a tax offset under the R&D Tax Incentive program, you must register your R&D activities with AusIndustry within 10 months of the end of the income year in which they were undertaken.

Do I need to register for the R&D Tax Incentive?

Is my Company Eligible to claim the R&D Tax Incentive?

To be eligible to claim the 45% refundable tax offset, your company (or company group) must have an annual turnover of less than $20 million and annual R&D expenditure of at least $20,000. Companies with an annual turnover of more than $20 million and meet the above criteria are eligible for a 40% nonrefundable tax offset.

In addition, the company must be either:

incorporated in Australia
incorporated in another country but be an Australian resident for tax purposes, or
incorporated in a country with which Australia has a double tax agreement, and undertake R&D activities through a permanent establishment in Australia.

Trusts are generally not eligible – except if they are a public trading trust with a corporation acting as a trustee. Companies that are exempt from tax are also not eligible.

Additionally, any business looking to introduce new or improved materials, products, devices, processes or services that have a technical edge or overcome a technical problem may be doing R&D. If that business is funding or creating new knowledge – or expanding existing knowledge – to provide this technical solution, then it is doing R&D. Therefore, this business may be able to claim the R&D Tax Incentive.

The R&D Tax Incentive is specifically designed to assist and encourage companies in the following sectors:

Manufacturing
Construction
Agriculture
Biomedical
IT
Banking and finance
Mining and minerals processing

Find out if your eligible here

What is the minimum R&D spend to be eligible?

To claim the tax offset, your total R&D spend for the income year must be at least $20,000.

Can I claim expenditure on R&D activities conducted overseas?

To claim expenditure on an activity conducted overseas, you must first obtain an Advance Finding that it is an eligible R&D activity. You must also obtain an Overseas Finding that such expenditure can be included in your claim. The application must be made in the first income year that the overseas activities are conducted.

Why does the Government provide a Tax Incentive for R&D?

Like the previous R&D Tax Concession, the new R&D Tax Incentive aims to encourage Australian businesses to undertake more research, development and commercialisation activities – and thus make them more competitive, create and maintain jobs, and drive economic growth.