What R&D Tax Incentives can you claim?

The AusIndustry R&D Tax Incentive application holds a significant importance in the context of trade and commerce in Australia. This tax incentive extends a targeted tax rebate for encouraging entities for conducting research and development activities that will benefit Australia on a large scale.

What you can claim

For R&D expenditure up to $100 million a year, companies can claim:

For income years from 1 July 2016:

  • a 43.5% refundable tax offset for companies if they have an annual turnover of less than $20 million. This tax offset is available to companies that are not controlled by tax exempt entities.
  • a non-refundable 38.5% tax offset for all other eligible companies. Unused non-refundable offset amounts may be able to be carried forward to future income years.

For income years before 1 July 2016:

  • the refundable offset rate is 45%.
  • the non-refundable offset rate is 40%.

Additional benefits include:

  • the option to gain certainty about the eligibility of your R&D activities through an Advance Finding
  • some overseas R&D activities are claimable (certain conditions apply).

If your company’s R&D expenditure is more than $100 million in a year, amounts claimed above $100 million may attract a non-refundable offset at the company tax rate.

Eligibility criteria to claim

  • You need to be an R &D entity
  • You should have conducted such R&D activities that meet the objective of the program
  • You should hold a registration with AUSINDUSTRY
  • Receive the major advantages from the R&D activities that are registered.

Key points that you should be aware of

If you are qualifying as a research & development identity and you want to claim the tax benefit, you require considering the following points:

  • You should register your research & development endeavours every year
  • You should be registered for GST

The AusIndustry R&D Application comes as a great support for many Australian companies as it provides them with a financial boost to conduct research and development activities at a much wider scale. To get help with applying for your R&D Tax application, contact Femia Accountants today.

Contact our office today on 9316 4500 or book a time to meet with us.