Know your Research & Development (R&D) tax incentives
Research and development (R&D) is a critical step in innovation, and the R&D Tax Incentive is a significant driver of innovation in Australia, encouraging companies to undertake R&D activities they might not otherwise be able to fund. However, many companies find accessing these incentives difficult and time consuming. Without someone to guide them through the process, some choose not take this major step forward.
BDO’s R&D taxation specialists see the process differently, and we want you to make the most of these opportunities. We understand the R&D tax incentives system and can provide tailored advice to suit your needs, helping you maximise your ability to access these tax incentives.
We also advise on various grants programs funded by the Commonwealth and State governments - another major source of funding for R&D in Australia.
Our team has extensive experience in successfully preparing applications and obtaining R&D benefits for activities undertaken to acquire new knowledge; or information in relation to new or improved materials, products, devices, processes or services.
What R&D tax incentives are available?
The R&D Tax Incentive currently provides the following support:
For financial years starting before 1 July 2016:
- a 45 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 40 per cent non-refundable tax offset for all other eligible entities for eligible R&D expenditure.
For financial years starting after 1 July 2016:
- 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 38.5 per cent non-refundable tax offset for all other eligible entities for eligible R&D expenditure.
BDO can help you access these 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.
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 Export Market Development Grant (EMDG) and Commercialisation grants.
Tax is a topic of discussion for this year’s Federal Budget. BDO in Australia delivers a comprehensive analysis of the Australian Federal Budget each year – find out more