R&D Tax Incentive
The R&D Tax Incentive (RDTI) is an Australian Government program that encourages companies to invest in innovative research and development by providing reimbursement of eligible expenses in the form of cash payments or a reduction in tax payable, depending on your financial position during the application period.
This program is designed to assist Australian companies with eligible R&D expenses of at least $20,000 during the same financial year. The RDTI is co-administered by both the ATO and AusIndustry.
In most cases…
If your annual turnover is under $20 million and you have enough tax losses, you can receive a 43.5% cash refund from the ATO, typically two to four weeks after lodging your company tax return (with an RDTI schedule)
If you’re in a tax payable position, your R&D claim will reduce the tax you’d otherwise be paying by 18.5% (43.5% minus the company tax rate of 25.0%)
The RDTI is relatively simple in theory however, the assessment of applicant eligibility, identification of eligible expenditure, division of Core and Supporting R&D Activities and the reporting and record keeping requirements add a level of complexity that will leave most seeking specialist advice.
Entry into the program first requires you to perform a self-assessment in order for you to decide if you’re eligible before applying. You can reach out to us for a confidential discussion if you have any concerns regarding your corporate structure and how it may affect your eligibility.
We can provide expert advice as to whether or not your current R&D activities fit within the criteria required for reimbursement. There are a complex series of measures used by both the ATO and AusIndustry to determine eligibility.
1. Your research must follow the ‘scientific method’.
That is, you will need to have clearly identified a comprehensive hypothesis from which you will design and undertake a series of experiments, with the intention of generating the new knowledge required to prove or disprove the questions posed in your original hypothesis.
2. The outcome of the experimentation could not have been known in advance.
Whether by consulting with an expert anywhere else in the world or by conducting extensive searches yourself – looking at areas such as literature reviews, scientific studies or other published bodies of work.
3. The conclusion of your experimentation will aim to generate new knowledge.
This new knowledge will contribute to the global pool in your selected area of R&D.
3 of the most important measures to consider:
If you’re confused at this point, trust us when we say that you are not alone (and we haven’t even touched on the eligible expenses or record keeping).
R&D Tax Central Pty Ltd is a registered Tax Agent. We have assisted hundreds of applicants to navigate the pitfalls of the program and are well versed in providing support for our clients regarding best practices for record keeping, the preparation of your annual applications as well as the identification and grouping of your eligible expenses. Unlike some other consultants, we will also provide you with a completed R&D Tax Schedule to pass onto your accountant at the end of the application process should you choose to engage with us.
We would love to hear from you and are standing by to offer a no-obligation and confidential discussion if you would like to know more.
By clicking on the link below you can confirm a time that suits you best for one of our R&D experts to get in touch. As soon as a time and date have been selected, we will send you a meeting link to add to your calendar.
Please note that your privacy is important to us. All requests will go directly to our R&D experts who are based in Brisbane, QLD .
