Linking your expenditure to your R&D activities
The expenses you can claim as R&D expenditure are limited to the extent they are incurred on R&D activities. Therefore, you must show that the amounts you are claiming on your tax return have been incurred on the activities you have registered with AusIndustry. The type of expenditure that qualifies for a notional deduction under Division 355External Link of the ITAA 1997 depends on the facts of each particular case. Administrative costs and overheads may be incurred on R&D activities if there is a direct link between the R&D activities and the expenditure incurred.
Ineligible expenses are those without sufficient link to the R&D activities, particularly if they relate to general company operations or marketing expenditure that would be incurred regardless of the R&D activities.
In these circumstances, prior to claiming the amount, you should ensure that you have carefully considered the extent to which this expenditure has been incurred on R&D activities. If you are unsure if an amount is eligible for the R&D tax incentive, you should seek guidance from us or a registered tax professional.