Want to offset the costs of your R&D?
The R&D Tax Incentive is an easy to access grant that supports innovation and aims to help businesses by offsetting some of the costs of undertaking research and development (R&D).
Who is eligible for the R&D Tax Incentive?
The grant is open to companies from any Australian industry and supports the development of new products, processes and services. Examples of this include expenditure incurred on R&D activities (including wages), the decline in value of assets used for conducting R&D activities and expenditure in relation to goods and materials processed or transformed during R&D activities.
Generally, companies liable to pay tax in Australia and incorporated under Australian law are eligible to claim the R&D Tax Incentive. Trusts are not eligible.
To benefit fully from the grant, your business needs to be undertaking an eligible R&D activity. Eligible R&D activities are broken into two categories:
1. Core R&D activities
Activities that involve a company attempting to do or make something that hasn’t been done before or cannot be done without experimenting. For example, the testing of a new or improved product, device, service or process.
2. Supporting R&D activities
Tasks or procedures that support core R&D activities.
If you want to claim the R&D incentive, you must register with AusIndustry (within 10 months of the end of your company’s income year) before you lodge your company income tax return.
The R&D tax offset is only available if your total notional deduction amount for an income year is at least $20,000. Companies may receive a 45% refundable tax offset if their aggregated turnover is less than $20 million. Companies with an aggregated turnover of more than $20 million can claim a 40% non-refundable offset for notional deductions incurred on eligible activities.
The R&D Tax Incentive is jointly managed by AusIndustry (on behalf of Innovation Australia) and the Australian Tax Office. For more information on the R&D Tax Incentive and how your business can best benefit from this scheme please contact Nidal Mazloum at Matthews Steer on (03) 9325 6300.