• # 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% × \$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% × \$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% × \$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 calculated as follows:

 38.5% × \$100,000,000 = \$38,500,000 30% × \$20,000,000 = \$6,000,000 Total R&D claim = \$44,500,000
End of example

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