What is a Research and Development Tax Incentive?
The Research and Development (R’n’D) Tax Incentive is a joint initiative of the Australian Taxation
Office (ATO) and AusIndustry designed to encourage industry investment in R’n’D. It is a broad-
based, non-industry specific, market-driven program that aims to boost company competitiveness,
improve productivity and deliver economy-wide benefits to Australia.
The scheme provides:
a refundable 43.5 percent tax offset for eligible companies with an aggregated turnover of less
than $20 million per annum
a non-refundable 38.5 percent tax offset for all other eligible companies.
The R’n’D Tax Incentive must be registered with AusIndustry annually within 10 months after the
company’s income year in which the activities are conducted. For the normal Australian financial
year, the deadline to claim is April 30 for the previous year.
So how do you know if you are eligible for the scheme?
Essentially, whilst the program is self-assessed, applicants must satisfy some basic eligibility
You must be producing new knowledge, which means your innovation must not have been
done before, particularly not in Australia. There are some exceptions. Discuss with your
It must be technically difficult to achieve. For example, whilst a piece of software may be
new, if a software developer is able to make the innovation work first time with the minimum
of effort, it’s not considered technically difficult.
The R’n’D must be carried out by a person skilled in that particular area of innovation. For
example, a person with no software experience is not considered a person skilled in software.
You must have a minimum eligible spend of $20,000 in the previous tax year. Maximum
eligible spend is $150 Million
Those are the basics. An experienced R’n’D Consultant will be able to advise your eligibility with an
If you have any questions, please contact Nathan from RADBE Consulting on 0432 928 500 or
Alternatively, Nathan is at the GC Hub weekly, usually on a Tuesday if you want to have a chat and find
Contributed by RADBE Consulting