Research and development tax concession: frequently asked questions

Basic eligibility requirements

What are the basic eligibility requirements for the R&D tax concession?

All of the following criteria must be satisfied for you to meet the basic eligibility requirements:

• You must be a company (you cannot claim the concession if you are undertaking the R&D as a company in the capacity of trustee of a trust other than a public trading trust (for more information, refer to subsection 73B(3) of the ITAA 1936)).
• Generally, you must have spent more than $20,000 on eligible R&D expenditure in the relevant income year (there are some exceptions to this rule, including where R&D was undertaken by a registered research agency on your behalf).
• Your activities must be eligible R&D activities (that is, the activities must meet the definition of R&D activities (for the Australian owned R&D tax concession) or Australian-centred R&D activities (for the foreign owned R&D tax concession) as defined in section 73B of the ITAA 1936.
• The expenditure must qualify for an R&D deduction or R&D tax offset under the relevant provisions of the ITAA 1936.
• The activities must be undertaken on your behalf and not on behalf of another person. This requirement does not apply to prevent a claim made under
• subsection 73B(14C) of the ITAA 1936 for expenditure on foreign owned R&D
• section 73QB of the ITAA 1936 for the 175% international premium
• which may be available for activities performed wholly or primarily on behalf of a grouped foreign company.
• You must be registered with Innovation Australia for each income year you want to claim the concession.