R&D Tax Incentive

From 1st July 2011, the Australian Government’s R&D Tax Incentive replaced the previous R&D Tax Concession.

The two components of the program are:

  • a 45 per cent refundable tax offset for eligible companies with an aggregated turnover of less than $20 million per annum; or
  • a non-refundable 40 per cent tax offset for all other eligible companies.

The R&D Tax Incentive is jointly administered by AusIndustry (on behalf of Innovation Australia) and the Australian Taxation Office (ATO).

MJA can help you obtain optimal benefits from the new R&D Tax Incentive, and satisfy the associated compliance requirements.

For example, we can work with you to:

  • Identify which of your company’s activities and costs are eligible, and register the activities
  • Apply for an Advance Finding to determine whether certain R&D activities are eligible prior to registration or apply for an Overseas Finding to claim work conducted outside Australia
  • Determine how much you should claim, taking account of your individual tax risk appetite
  • Prepare your annual claim
  • Establish internal systems and processes to make compliance easy and ensure you can support your claim in case of audit
  • Assist with any external audits and reviews to satisfy ATO and AusIndustry requirements

Contact us to find out more about the potential for your company to benefit from the R&D Tax Incentive, and how MJA can help you.

Advance and Overseas Findings

In general, the R&D Tax Incentive is a self-assessment program. Companies are required to determine whether they are eligible, how much they can claim, and what is required to defend their claim in case of an audit.

But where eligibility is not clear cut, you can apply for an Advance or Overseas Finding prior to registering the activity:

  • An Advance Finding determines whether an activity is a core R&D activity, a supporting R&D activity, or neither.
  • An Overseas Finding determines whether spending on R&D activities conducted overseas (which is generally not eligible) can be included in your claim.

These findings provide certainty as they are binding on both Innovation Australia and the ATO.

Contact MJA for help with:

  • determining whether you can or should seek an Advance or Overseas Finding
  • applying for an Advance or Overseas Finding
  • gathering the documentation required to support your application

Connect to us