Research and development record keeping
To work out your notional R&D deduction and support your claims, you need to keep records to show all of the following:
- how the expenditure you have incurred relates to the R&D activities you have registered
- how you have apportioned your expenditure between eligible R&D activities and ineligible activities
- that you receive the major benefit from the R&D activities
- when amounts have been paid to associates
- how you have calculated adjustments required as a result of either
- receiving a government recoupment (clawback)
- producing a marketable product (feedstock adjustments).
These records must be relevant to the year you are claiming your R&D tax offset. However, if you need to make adjustments these records may also be relevant for future years.
You must keep up-to-date records for each R&D activity so you are ready to calculate and claim your R&D tax offset in your company tax return at the end of the year.
The records you currently keep for your business will generally be enough to support your R&D tax offset claim, if they show:
- you incurred the expenditure (and if incurred to an associate the amount(s) paid)
- the expenditure was eligible for the R&D tax incentive
- you received the major benefit from your expenditure on R&D activities
- the amount of your expenditure that relates to the R&D activities you have registered with AusIndustry.
You must also be able to support your methodology for apportioning your expenditure between eligible R&D activities and non-eligible activities.
For examples of records you may need to keep in relation to your R&D activities, visit the AusIndustry website and refer to R&D Tax IncentiveExternal Link.
It is your responsibility to show us that the basis for calculating your notional R&D deduction produces, as far as practicable, accurate claims consistent with the law and its interpretation. You must be able to substantiate your claims for R&D expenditure with your records.