• Attention

    We’re currently updating this page to make it easier for you to find the information you need. During this time, you might find some links are broken. We’re working to resolve these and any other issues as quickly as possible. Thank you for your patience.

    End of attention

    Step 5 – Calculate your tax offset

    Once you have worked out which offset you can claim, you can calculate the amount of your tax offset:

    • to calculate your claim for the 43.5% refundable R&D tax offset, multiply the total of the notional deductions by 43.5%
    • to calculate your claim for the 38.5% non-refundable R&D tax offset, multiply the total of the notional deductions by 38.5%.

    Where your notional deductions exceed $100 million for an income year, your claim for the R&D tax offset is equal to the sum of notional deductions for the first $100 million multiplied by the rate determined above, and the notional deductions in excess of $100 million multiplied by the company tax rate. (This applies to income years starting on or after 1 July 2014 and before 1 July 2024).

    We've included three examples (below) to help you work out which calculation might apply to you.

    Example 1

    Company X is an R&D entity entitled to notional deductions of $1,500,000 for R&D expenditure. Company X's aggregated R&D turnover for the income year is $16,000,000. Company X is not controlled by any exempt entities. Therefore, Company X is entitled to the 43.5% refundable R&D tax offset, which is calculated as follows:

    43.5% x $1,500,000 = $652,500

    End of example

     

    Example 2

    Company Y is an R&D entity entitled to notional deductions of $9,000,000 for R&D expenditure. Company Y's aggregated R&D turnover for the income year is $40,000,000. Company Y's turnover is greater than $20,000,000 so the company can claim the 38.5% non-refundable R&D tax offset, which is calculated as follows:

    38.5% x $9,000,000 = $3,465,000

    End of example

     

    Example 3

    Company Z is an R&D entity entitled to notional deductions for monetary CRC contributions made, which total $18,000 in the relevant income year. Company Z's aggregated R&D turnover for the income year is $4,000,000. Company Z is not controlled by any exempt entities. The company can claim the 43.5% refundable R&D tax offset, which is calculated as follows:

    43.5% x $18,000 = $7,830

    End of example

     

    Example 4

    Company XYZ is an R&D entity entitled to notional deductions of $120,000,000 for R&D expenditure. Company XYZ's aggregated R&D turnover for the income year is $400,000,000. Company XYZ's turnover is greater than $20,000,000 so the company can claim the 38.5% non-refundable R&D tax offset on notional deductions up to $100,000,000, and the balance of $20,000,000 can be claimed at the company tax rate of 30%. This is is calculated as follows:

    38.5% x $100,000,000 =

    30% x $  20,000,000 =

    $38,500,000

    $  6,000,000

    Total R&D claim =

    $44,500,000

     

    End of example

    Next step:

    Last modified: 25 Oct 2016QC 24606