• Research and development tax incentive – clawback adjustments

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    Introduction

    The research and development (R&D) tax incentive provides a targeted tax offset to encourage certain companies (R&D entities) to conduct R&D activities that benefit Australia.

    It provides generous benefits for companies performing eligible R&D activities and has the following two core components:

    • a 43.5% refundable tax offset for eligible entities with an aggregated turnover of less than $20 million - unless they are controlled by tax exempt entities
    • a 38.5% non-refundable tax offset for all other eligible entities.

    The rate of the R&D tax offset is reduced to the company tax rate (currently 30%) for that portion of an entity’s notional R&D deductions that exceeds $100 million for an income year. This change applies to assessments for income years starting on or after 1 July 2014 and before 1 July 2024.

    The tax incentive replaces the R&D tax concession and is jointly administered by Innovation Australia (assisted by AusIndustry) and us.

      Last modified: 25 Oct 2016QC 24623