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.

Further information

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 995-1of the ITAA 1997.

For more information about:

End of further information
    Last modified: 25 Oct 2016QC 26121