The Research and Development (R&D) Tax Incentive program, administered by the Department of Industry, Science, and Resources (AusIndustry) and the Australian Taxation Office (ATO), is designed to support businesses undertaking R&D activities by providing a tax offset.
Key Deadline
The deadline to submit an R&D Tax Incentive application for the financial year ending 30 June 2024 is 30 April 2025.
With this deadline fast approaching, businesses intending to claim the R&D Tax Incentive for the 2024 financial year should act promptly to ensure the timely submission to AusIndustry.
Eligibility Criteria
To qualify for the R&D Tax Incentive, activities must meet specific eligibility requirements and be classified as either Core R&D activities or Supporting R&D activities.
Core R&D Activities include experimental activities whose outcome is not known in advance. These can only be determined by applying a systematic progression of work that is based on scientific principles and proceeds from hypothesis to experiment, then to observation and evaluation. Leading to logical conclusions and the creation of new knowledge.
Tax Offsets Available
For businesses with an annual turnover of less than $20 million:
Eligible for a refundable tax offset of 18.5% above the company’s corporate tax rate, resulting in:
- 25% + 18.5% = 43.5%
- 30% + 18.5% = 48.5%
For businesses with an aggregated turnover of $20 million or more:
Eligible for a non-refundable tax offset based on R&D intensity (percentage of total eligible R&D expenditure):
- 8.5% for R&D expenditure up to 2% of total expenditure (38.5% total offset)
- 16.5% for R&D expenditure exceeding 2% of total expenditure (46.5% total offset)
Take Action Now
With the submission deadline fast approaching, now is the time to ensure your application is completed accurately and submitted on time.
At Prosperity, we specialise in guiding businesses through the R&D Tax Incentive process, ensuring compliance and maximising eligible claims. If you have any questions or require assistance with your application or the calculation of your eligible notional deductions, please contact us today. Our expert team is ready to help you make the most of this valuable incentive.
Reach out to Prosperity now to discuss your R&D eligibility and submission requirements, or contact Michael Kinniard at mkinniard@prosperity.com.au or your Principal Adviser.