Information AusIndustry Research & Development Tax Incentive Program
Program Aim
The R&D Tax Incentive is a broad-based, market driven program accessible to all industry sectors. It provides a targeted tax offset to encourage more companies to engage in Research and Development.
Benefits
For FY2018/19 year, available tax offsets based on annual turnover are:
- Turnover of less than $20M are eligible for a 43.5% refundable tax offset
- Turnover of greater than $20M are eligible for a 38.5% non-refundable tax offset
Eligible Entities
The types of entities eligible for the R&D Tax Incentive are corporations (called ‘R&D entities’) that are:
- Incorporated under an Australian law; or
- Incorporated under foreign law but are Australian residents for income tax purposes; or
- Incorporated under foreign law; and
- Are residents of a country with which Australia has a double tax agreement, including a definition of ‘permanent establishment’; and
- Carry on business in Australia through a permanent establishment as defined in the double tax agreement.
Generally trusts are not R&D entities. The definition of R&D entities extends to body corporates in the capacity of trustees of public trading trusts, but not to trustees of any other sort of trusts.
Eligibility of R&D Activities
- The work must involve R&D which will deliver a new product, process or service, which based on research of publicly available solutions does not exist in the market place (worldwide).
- As the outcome of the work cannot be known in advance on the basis of current knowledge or experience, the applicant undertakes systematic R&D activities that involve experimentation.
- The applicant must control the IP being developed under the claim.
- The applicant can claim both the direct and some indirect costs incurred in undertaking the activities.
Contact Matthews Steer today on 03 9325 6300 to learn more about your eligibility for government business grants, and how our Grants Team can help support your applications.