Tax incentives available for investing businesses
The Research and Development Tax Incentive (R&DTI) is a tax offset for companies conducting eligible R&D activities. The incentive encourages spending and investment by businesses to help their company grow and innovate whilst also providing benefits for the Australian economy.
The tax offset for eligible R&D activities conducted from 1 July 2021 is based on a premium on top of your corporate tax rate.
Turnover of less than $20 million
For businesses with aggregated turnover of less than $20 million, the tax offset of your corporate tax rate plus an 18.5% premium applies.
Turnover of $20 million or more
For businesses with aggregated turnover of $20 million or more, the non-refundable R&D tax offset is your corporate tax rate plus an incremental premium.
The premium increments are based on your R&D Intensity. This is a percentage of your eligible R&D expenditure as proportion of your total expenditure for the year.
- All eligible R&D expenditure up to 2% R&D Intensity will receive a non-refundable R&D tax offset equal to your corporate tax rate plus 8.5% premium.
- Additional eligible R&D expenditure above 2% R&D Intensity will receive a non-refundable R&D tax offset of your corporate tax rate plus 16.5% premium.
How does it work
Before you register for the R&DTI, you must:
- self-assess whether your business is eligible
- self-assess if your R&D activities are eligible
- self-assess that your R&D expenditure is eligible
- keep records and evidence to support your registration and claim.
To complete your self-assessments, view the full criteria here.
The R&DTI is jointly administered by:
- AusIndustry on behalf of Industry, Innovation and Science Australia
- the Australian Tax Office (ATO).
You need to register your R&D activities with AusIndustry then claim your tax offset through your annual tax return with the ATO.
How to apply
To apply for the incentive, you will need to use the ATO’s customer portal which requires you to link your myGovID to your company ABN to gain access.
For more information on the portal and how to submit your application, click here.
If you have any questions regarding the R&D Tax Incentive, or would like assistance determining if your business is eligible, please contact Dennis Barnett on 03 5443 0344 or email afs@afsbendigo.com.au
