When does the clawback apply?
If you are eligible for the R&D tax incentive and you receive a government recoupment (such as a government grant or reimbursement) that relates to expenditure that is eligible for the R&D tax incentive, clawback applies.
Clawback does not decrease the grant or offset you receive; rather, it increases the income tax you are liable to pay on the recoupment. This income tax increase is called a 'clawback adjustment'.
A clawback adjustment arises where, during an income year, you either receive or are entitled to receive a recoupment from an Australian government agency, or a state or territory body, and the following applies:
- the recoupment (such as a reimbursement) relates to expenditure incurred on certain activities or the recoupment (such as a grant) requires expenditure to either be or have been incurred on certain activities
- you have claimed the R&D tax incentive in relation to the expenditure (or decline in value notional deductions where the expenditure was for a depreciating asset used in those activities).