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  • Eligible R&D entities

    You can only claim the R&D tax incentive if you are an R&D entity. You are an R&D entity if you are a corporation that is any of the following:

    • incorporated under an Australian law
    • incorporated under a foreign law but you are an Australian resident for income tax purposes
    • incorporated under a foreign law and you are both    
      • a resident of a country with which Australia has a double tax agreement, with a definition of 'permanent establishment'
      • carrying on business in Australia through a permanent establishment as defined in the double tax agreement.

    You are not eligible for the R&D tax incentive if you are:

    • an individual
    • a corporate limited partnership
    • an exempt entity (where your entire income is exempt from income tax).

    Trusts are not generally R&D entities, except a body corporate in the capacity of trustee for a public trading trust.

    There are special rules to consider if you are a member of a consolidated group or multiple entry consolidated (MEC) group or a partner in a R&D partnership.

    For the definition of:

    • 'R&D entity', refer to section 355-35 of the Income Tax Assessment Act 1997 (ITAA 1997)
    • 'Australian law', 'foreign law' and 'Australian resident', refer to section 995-1 of the ITAA 1997.

    See also:

      Last modified: 16 Jun 2021QC 26121