STEP 1: What Is The Benefit?

The R&D Tax Incentive is a targeted, generous and easy to access entitlement program  that may help you offset some of the costs of doing R&D. The program aims to help more businesses do R&D and innovate.



It is open to firms in all sectors that are conducting eligible R&D.


Companies may receive a 43.5% refundable tax offset if their aggregated turnover is less than $20 million.



For aggregated turnover more than $20 million a 38.5% non-refundable offset can be claimed for notional deductions incurred on eligible activities. 


A company must have notional R&D deductions for an income year of at least $20,000  in order to claim a R&D Tax offset.


Example: Company X's Tax offset


Example tax offsetCompany X is an R&D entity entitled to notional deductions of $150,000 for R&D expenditure.

Company X's aggregated turnover for the income year is $1,600,000.

Company X is entitled to the 43.5% refundable R&D tax offset , which is calculated as follows:

43.5% x $150,000 = $65,250 R&D Tax offset  (refund subject to other tax liabilities)

Note that when completing your income tax return, the amounts that make up your R&D tax offset will be removed from your standard deductions. This occurs so that you do not receive both a standard deduction and the R&D tax offset for the same expenditure.