Research and Development Tax Incentive
The Research and Development Tax Incentive (R&DTI) offers a tax offset for companies conducting eligible R&D activities.
The R&D Tax Incentive is a business assistance program administered by the Australian Government to encourage and support businesses to undertake R&D activities that they may not otherwise be willing to attempt.
It encourages investment in R&D to help your company to grow and innovate which generates benefits for the Australian economy.
We will review your current and historic R&D claims to ensure the legitimacy of the R&D benefit claimed and assess your eligibility with legislative requirements.
We understand how different tax incentives and grants interact with each other and overlap with other provisions of the Tax Acts, ensuring you are optimising all available government incentives.
We will assist in preparing a compelling grant submission with honest, professional, fact-based communication.
Assisting businesses in accessing the R&D tax incentive
Many people still do not realise that R&D tax applies to 'real world' innovation, not just high tech science projects. Companies developing and improving products and processes are equally eligible for R&D tax incentive support.
In addition, many people do not realise that companies with tax losses (with grouped turnover less than $20m) are eligible to receive cash from the ATO, not just increases to future tax losses.
Aggregated turnover of less than $20 million
For R&D entities with aggregated turnover of less than $20 million, the refundable R&D tax offset is the entity’s corporate tax rate (either 25% or 30%) plus an 18.5% premium.
The benefit is refundable when the R&D entity has tax losses of at least an amount equivalent to its R&D expenditure allocation and when it has no outstanding tax liabilities.
Aggregated turnover of $20 million or more
For R&D entities with aggregated turnover of $20 million or more, the non-refundable R&D tax offset is dependent on the ‘R&D intensity’ (defined as eligible R&D expenditure as
proportion of the entity’s total expenditure for the year).
For R&D expenditure:
• Below 2% R&D intensity, the R&D entity will be eligible for an R&D tax offset equal to the entity’s corporate tax rate plus 8.5%
• Above 2% R&D Intensity the R&D entity will receive an R&D tax offset of the corporate tax rate plus a 16.5% premium.
• Identification of R&D Tax Incentive opportunities
• Preparation or review of the R&D Tax Incentive claim
• Advance Overseas Findings
• AusIndustry and/or ATO reviews
• R&D loans
• R&D documentation and governance
• Inbound R&D – assistance with setting up global entities in Australia to undertake R&D activities within Australia
• Early-Stage Innovation Company Incentives
• Identification of other Government grant and incentives opportunities
Jessica Olivier is the National Leader, Manufacturing and a Director of the Tax Services division in Sydney, providing specialist R&D tax incentive compliance and consulting services.