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The R&D Tax Incentive is an Australian Government program that provides tax offsets to eligible companies undertaking qualifying research and development activities.
It can help businesses reduce the cost of innovation and support investment in developing new or improved products, processes and services.
However, determining whether an activity qualifies can be complex. Eligibility depends on the nature of the R&D activity, the way it is conducted, the expenditure incurred and the records available to support the claim.
RSM Australia helps businesses identify eligible R&D activities, assess and substantiate expenditure, prepare or review R&D Tax Incentive claims and respond to ATO or Department of Industry, Science and Resources reviews.
How does the R&D Tax Incentive work?
The R&D Tax Incentive provides a tax offset for eligible R&D expenditure incurred by eligible companies. The amount of the benefit depends on factors including the company's aggregated turnover and the nature and amount of eligible R&D expenditure.
- For companies with aggregated turnover of less than $20 million, the current refundable R&D tax offset is generally the company's applicable corporate tax rate plus an 18.5% premium, subject to the program's eligibility requirements.
- For companies with aggregated turnover of $20 million or more, the current R&D tax offset is generally non-refundable, with the premium determined by the company's R&D intensity.
The R&D Tax Incentive is a self-assessment program. Businesses need to be able to demonstrate that their activities and expenditure satisfy the relevant requirements and maintain records to support their claims.
Businesses generally need to register their R&D activities within 10 months after the end of the income year in which the activities were conducted.
How our R&D team can help:
Our R&D team can support your business throughout the R&D Tax Incentive process, from identifying potential opportunities and assessing eligibility through to preparing claims and responding to regulatory reviews.
Identification of R&D Tax Incentive opportunities – assessing your business activities and identifying potential R&D projects and expenditure that may qualify for the incentive.
Preparation or review of R&D Tax Incentive claims – helping you identify eligible activities and expenditure, prepare supporting documentation and review claims to ensure they are appropriately substantiated.
Advance and overseas findings – assisting with applications for advance findings where greater certainty around the eligibility of R&D activities is required, as well as overseas findings where eligible R&D activities need to be undertaken outside Australia. A positive overseas finding is generally required before overseas R&D expenditure can be claimed.
AusIndustry and/or ATO reviews – supporting businesses through reviews of R&D activities, expenditure and claims, including preparing responses and supporting documentation.
R&D loans and financing – helping businesses explore financing options that may provide access to funding against anticipated R&D Tax Incentive benefits and support cash flow during the R&D process.
R&D documentation and governance – helping establish appropriate processes, records and governance frameworks to document R&D activities and associated expenditure and support the substantiation of claims. Maintaining records before, during and after R&D activities is an important part of the program.
Inbound R&D – assisting global businesses with establishing Australian entities and structures to undertake R&D activities in Australia, including access to the Australian R&D Tax Incentive where applicable.
Early-Stage Innovation Company (ESIC) incentives – helping eligible innovative businesses and investors understand and access available ESIC incentives and assess how these may interact with broader funding and innovation strategies.
Other government grants and incentives – identifying other government grants, tax incentives and funding opportunities that may complement your R&D activities and broader innovation strategy.
Research and Development Tax Incentive solutions for businesses of all industries
We have an experienced team of R&D tax advisers with mixed science and accounting qualifications and backgrounds. Our clients range from startups to multinational corporates, and cover industries from agriculture to banking.
We are active supporters of the Innovation Community, sponsoring events, and providing speakers and committee members to a wide variety of associations and groups.
Why choose RSM?
Specialist R&D expertise – Our team has extensive experience advising businesses across a range of industries, including technology, manufacturing, engineering, resources, biotechnology and agribusiness.
End-to-end support – From identifying potentially eligible activities and expenditure through to preparing or reviewing claims, we can support your business throughout the R&D Tax Incentive process.
Technical and tax expertise – Our R&D specialists understand the interaction between the R&D Tax Incentive and broader corporate tax provisions, helping businesses navigate complex claims and identify potential risks.
Support for complex R&D needs – Our team can assist with matters including Advanced and Overseas Findings, inbound R&D, R&D financing, historical claim reviews and R&D governance.
A broader business perspective – R&D incentives are often one part of a wider funding and tax strategy. Our multidisciplinary team can help businesses consider R&D Tax Incentive claims alongside government grants, tax planning, financing and other available incentives.
Frequently asked questions:
Projects involving the development or improvement of products, processes, software, technology or other solutions may qualify where the activities meet the legislative requirements. For example, experimental development undertaken to resolve technical uncertainty may be eligible, while routine development or standard commercial activities may not be.
R&D activities generally need to be registered within 10 months after the end of the income year in which they were conducted. Businesses considering historical claims should review their previous activities, expenditure and supporting records to determine whether registration and claim requirements can still be met.
Yes. Eligible R&D activities generally need to be registered with the Department of Industry, Science and Resources before the R&D Tax Incentive can be claimed through the company's tax return. Registration and claiming are separate processes.
Businesses should maintain contemporaneous records showing what activities were undertaken, the technical or scientific uncertainty being addressed, the experimentation performed and the expenditure associated with the eligible activities. The level and type of evidence will depend on the nature of the R&D project.
Yes. RSM can assist businesses responding to AusIndustry and ATO reviews, including reviewing the underlying R&D activities and expenditure, assessing supporting evidence and helping prepare responses to requests for information.
Depending on your business, industry and project, other government grants and incentives may be available in addition to the R&D Tax Incentive. RSM can help identify potential funding opportunities and assess how they may fit within your broader innovation and investment strategy.
Key contacts
Contact our R&D tax professionals
