Overview
The Research and development (R&D) tax incentive provides a tax offset for eligible R&D activities and is targeted toward R&D that benefits Australia. The incentive, which came into effect on 1 July 2011 and replaces the R&D tax concession, is geared towards encouraging companies to engage in R&D. It has two core components:
- a refundable tax offset for certain eligible entities whose aggregated turnover is less than $20 million
- a non-refundable tax offset for all other eligible entities.
About the program
The R&D tax incentive provides a tax offset to encourage companies to engage in R&D that benefits Australia. The program is administered jointly by AusIndustry (on behalf of Innovation Australia) and the ATO.
Eligibility
To be eligible for the R&D tax incentive you must be an R&D entity, you must be engaging in eligible activities and in most cases have notional R&D deductions of at least $20,000.
Registering
You must register your R&D activities each year with AusIndustry prior to making a claim for the R&D tax incentive in your company's tax return.
Adjustments
You may need to make adjustments to your income tax return if you have either received a government recoupment, or your R&D activities have produced marketable products or you are registered for GST.
Claiming the tax offset
There are six steps to claiming the R&D tax offset. These steps help you work out if you can claim R&D tax offsets, which offsets you can claim and how to claim them.
Correcting mistakes and disputing decisions
In most cases, you will be able to amend your claim or dispute a decision made.
Getting help
AusIndustry can help you work out whether or not your R&D activities are eligible and help you to register your R&D activities. We can help you with your claim and with working out whether or not you, and the amounts you wish to claim, are eligible for the R&D tax incentive. We also offer advice about how the laws apply to you.
Compliance and monitoring
We undertake complementary risk assessments with AusIndustry and monitor and analyse claims relating to R&D expenditure to make sure they comply with the law.
Contact us
Contact us or AusIndustry for more information about the R&D tax incentive.
Contents: Guide to research and development tax incentive
Overview
About the program
Eligibility
Eligible entities
Eligible activities
Eligible notional deductions
Registering
Adjustments
Clawback adjustments
Feedstock adjustments
Claiming the tax offset
Self-assessment
Steps to claiming
Step 1 - Check that you meet the initial eligibility requirements
Step 2 - Work out if you are controlled by any exempt entities
Step 3 - Calculate your aggregated turnover
Step 4 - Work out which tax offset you can claim
Step 5 - Calculate your tax offset
Step 6 - Lodging your claim
Keeping records
Using a tax agent or R&D consultant
Correcting mistakes and disputing decisions
Amend your tax return
Objecting to our decisions
Getting help
Compliance and monitoring
Contact us
Last Modified: Friday, 29 June 2012