The R&D Tax Incentive offers significant benefits to innovative companies, both big & small.
The due date to register eligible R&D with AusIndustry is four months from end of financial year, being the 30th of April.
With that date approaching, companies need to review their eligibility and start work on their application to avoid missing out.
The R&D Tax Incentive consists of a tax offset for eligible R&D expenditure calculated as:
- Firms with annual turnover of less than $20M – A refundable tax offset based on the company tax rate plus 18.5%. In most instances, this means that the tax offset continues to be 43.5%.
- Firms with annual turnover of $20M or more – A non-refundable tax offset based on R&D intensity of:
- 0% to 2% intensity: the company tax rate plus an 8.5% premium; and
- >2% intensity: the company tax rate plus a 16.5% premium.
The tax offset can be claimed for eligible expenditure incurred in relation to “core activities” and “supporting activities”.
Core activities are experimental activities whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience, but can only be determined by applying a systematic progression of work that:
- is based on principles of established science; and
- proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions; and
- that is conducted for the purpose of generating new knowledge (including new knowledge in the form of new or improved materials, products, devices, processes or services).
Supporting activities are activities that do not constitute core activities, but that are directly related to core R&D activities.
For further information on the R&D Tax Incentive, please refer to AusIndustry’s Guide to Interpretation.
If you need more information on the R&D Tax Incentive, or require assistance to complete an application, please get in touch.
Sky Accountants Ballarat
Phone: 03 5332 8855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Gisborne & Macedon Ranges
Phone: 03 5428 1400
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437