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What is R&D?
Core R&D activities are experimental activities, such as:
- Those with outcomes 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 b. That are conducted for the purpose of generating new knowledge (including new knowledge in the form of new or improved materials, products, devices, processes or services).
- Many companies conduct Research and Development through a deliberate and planned programme and process. However, many companies also conduct R&D without realising they may qualify for the Australian Government’s Tax Incentive. If you’re improving your products, services, materials, processes or services, you may qualify for the government’s R&D Tax Incentive.
Am I eligible?
To be eligible to claim for the R&D tax incentive, you’re a company must be:
- Incorporated under Australian law or
- Incorporated under foreign law but an Australian resident for income purposes or
- Incorporated under foreign law and:
- A resident of a country with which Australia has a double tax agreement, including a definition of 'permanent establishment'
- Carrying on business in Australia through a permanent establishment as defined in the double tax agreement.
You’re not able to apply under these circumstances:
- As an individual
- As a corporate limited partnership
- As an exempt entity (where your entire income is exempt from income tax).
Trusts are not generally eligible R&D entities.
What can I claim?
You can claim core and supporting costs related to Research & Development activities. This could include the costs rental, software, licences, and market research.
Arrange a free meeting with us and we can advise you on the range of costs that could qualify as an R&D cost to claim.
How much can I get back?
From 1 July 2016, companies with a turnover of under $20 million can claim a 43.5% refundable tax offset of their R&D expenditure. All other eligible companies can claim a non-refundable 38.5% tax offset.
What do I need to do?
Contact us for a free meeting so we can help you untangle the R&D spaghetti and maximise your claim.
