The Research and Development Tax Incentive (R&D Tax Incentive or R&DTI) helps to offset some of the costs you put into eligible R&D, which benefits the wider Australian economy
The R&D tax incentive is a rebate you get for developing new products and services. It allows you to claim back up to 43.5% of the costs related to research and development
How does the R&D tax incentive work?
You need to undertake eligible R&D activities that involves research and experimentation and:
- spend over $20,000
- operate as company (no trusts, partnerships, sole traders)
- undertake R&D activities in Australia
How do I claim R&D tax incentive?
In order to claim the R&D tax incentive, you need to lodge an Activity Registration every year that describes your R&D work. You will be asked to break down your R&D experiment into two key components:
- Outcome – whether an expert could predict the outcome in advance
- Purpose – the R&D is conducted for the purpose of generating new knowledge
Once you have registered your R&D with AusIndustry you will then be able to include include an R&D Schedule in your ATO Income tax return and receive an R&D tax offset
What qualifies as R&D?
To be eligible for the R and D tax incentive, you need to ask yourself if what you are doing can be considered innovative in your field:
- Novel – Are you developing something that does not currently exist?
- Testing –Did you need to test the performance of what you are creating?
You could be:
- developing new software for the hospitality industry
- crafting bespoke solutions using raw materials
- engineering new devices for tracking and monitoring equipment
Getting Your R&D Tax Incentive Journey Right using the The Integrity Framework user journey
The Integrity Framework considers integrity risk and behavioral factors that influence program participants
Not all situations have been covered in this user journey. There may be other options available, depending on your circumstances. AusIndustry works with the Australian Taxation Office on the joint administration of the program, including on compliance activities
The above User Journey guides you through the steps along your journey and possible interventions you may experience, including if should you be selected for integrity management activities. For more detail on the steps in user journey, view the Steps in the user journey
We can help your business to get it right
We are committed to supporting innovative Australian businesses. We are here to support you to understand how to apply for and comply with the R&D Tax Incentive program
Contact Steve Dowling on 0409 478 850 for a confidential, no obligation discussion