Research and development tax incentive – who can claim
The R&D tax incentive provides a targeted tax offset to encourage certain companies to conduct R&D activities that benefit Australia.
It provides generous benefits for companies performing eligible R&D activities and has 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.
It has replaced the R&D tax concession and is jointly administered by us and Innovation Australia (assisted by AusIndustry).
To be eligible to claim the R&D tax incentive you must meet a number of other requirements in addition to incurring eligible amounts on your registered R&D activities. For example, you must work out:
This guide will help you work out whether you are an eligible R&D entity, and when R&D activities are conducted for you (or another relevant entity).
When we say 'you' in this guide we are referring to an entity that is working out whether it is eligible to claim the R&D tax incentive.
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For more information on other requirements that must met before claiming the R&D tax incentive, refer to Research and development tax incentive - home including:
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- expenditure you can claim
- record keeping
- how you can claim the R&D tax incentive.