Research & Development (R&D) Tax Incentives

The R&D tax incentive is a significant driver of innovation in Australia. It encourages companies to undertake R&D activities they might not otherwise be able to fund, but many companies find accessing tax incentives difficult and time consuming. Without someone to guide them through the process, some choose not to take this major step forward.

Our team of R&D tax specialists understand the tax incentives system and have extensive experience in successfully preparing applications and obtaining R&D benefits. This can be for both activities undertaken to acquire new knowledge; and information in relation to new or improved materials, products, devices, processes or services. Our team also advise on various grants programs funded by the Commonwealth and State governments - another major source of funding for R&D in Australia.

How BDO can help

BDO can help you access R&D tax incentives by:

Identifying eligible R&D activities, including classification of ‘core’ and ‘supporting’ activities
Reviewing technical documentation to support the eligibility of R&D activities, providing feedback as necessary to ensure the most robust R&D registration
Analysing eligible R&D expenditure, ensuring proper scrutiny of the more complex rules regarding feedstock, capital acquisitions and ‘on own behalf’
Preparing and negotiating advance findings to determine eligibility prior to lodgement
Preparing applications for overseas findings for R&D activities conducted outside Australia
Reviewing and advising on your internal systems and processes to make data collection and compliance more efficient
Advising on the best way to structure future R&D projects to maximise your benefit.

To understand current grant funding opportunities for your industry, business or specific project, subscribe to receive our grants and incentives updates or contact a member of our team for assistance.

R&D TAX OR GRANT HELP

What R&D tax incentives are available?

For financial years starting after 1 July 2021:

A 43.5 per cent refundable tax offset for eligible entities with an annual aggregated turnover of less than $20 million, and which are not controlled by income-tax exempt entities, for expenditure on eligible R&D activities in Australia; and

A non-refundable R&D tax offset rate based upon the intensity of your R&D expenditure as a proportion of total expenditure for the year:

An R&D intensity up to 2 per cent receives a tax offset equal to your company tax rate plus a 8.5 per cent premium
Any expenditure which exceeds the 2 per cent intensity threshold will attract a premium rate of up to 16.5 per cent (i.e. up to an additional 8 per cent incentive for the R&D expenditure above the 2 per cent intensity threshold).

R&D compliance

BDO’s R&D taxation specialists provide other services to support R&D activities. We can:

Manage Australian industry and Australian Tax Office compliance activities, including preparing responses to requests for information and full audits

Represent you before the Administrative Appeals Tribunal if required

Advise on R&D concessions available in other jurisdictions such as the US, Canada and Singapore with the relevant BDO firms in our international network

Advise and manage the various grants programs funded by the Commonwealth and State governments, including the Export Market Development Grant (EMDG) and Commercialisation Grants.

See how the Australian R&D tax incentive compares to other R&D incentive programs in other jurisdictions using the BDO Global interactive tool.