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R&D Tax Incentive
Program ID: 6369
Overview
This program seeks to provide incentives for companies engaging in research and development (R&D) in Australia. It provides eligible companies with a tax offset for expenditure on eligible R&D activities undertaken during the year.

The objectives of the program are to:
- Boost competitiveness and improve productivity across the Australian economy.
- Encourage industry to conduct R&D that may not otherwise have been conducted.
- Provide business with more predictable, less complex support.
- Improve the incentive for smaller firms to engage in R&D.

The two core components are:
- 45% refundable tax offset (equivalent to a 150% deduction) for eligible entities with an aggregated turnover of less than $20 million per annum, provided they are not controlled by income tax exempt entities.
- 40% non-refundable tax offset (equivalent to 133% deduction) for all other eligible entities (entities may be able to carry forward unused offset amounts to future income years).

As of 16 September 2016, the Bill proposing a reduction in the R&D Tax Incentive program has passed both Houses and the change will impact both the refundable and non-refundable rates of the R&D Tax Incentive with a reduction of 1.5% effective from 1 July 2016. This will affect all R&D claims for the 2016-17 financial year (specifically, R&D expenditure incurred from 1 July this year) but not the claims currently being processed for 2015-16.

The rate of the R&D tax offset is reduced to the company tax rate (currently 30%) for that portion of an entity’s notional R&D deductions that exceeds $100 million for an income year. This change applies to assessments for income years starting on or after 1 July 2014 and before 1 July 2024.

The deadline for lodging an application for registration is ten months after the end of a company's income year. This means:
- A company with a non-standard income period of 1 January 2015 to 31 December 2015, must lodge its registration application with AusIndustry by 31 October 2016.
- A company with a standard income period of 1 July 2015 to 30 June 2016 must lodge its registration application with AusIndustry by 30 April 2017.

Applications for Overseas Findings must be submitted before the end of the first income year in which the applicant start the overseas R&D activities.
Who Can Apply
Eligible applicants include companies that have incurred notional deductions (R&D expenditure) of at least $20,000. These companies must be an R&D entity, that is:
- Incorporated under Australian law.
- Incorporated under foreign law but an Australian resident for income purposes.
- Incorporated under foreign law and:
a) A resident of a country with which Australia has a double tax agreement, including a definition of 'permanent establishment'.
b) Carrying on business in Australia through a permanent establishment as defined in the double tax agreement.

Companies can claim less than $20,000 R&D expenditure if they have conducted their R&D through a Research Service Provider (RSP) or Co-operative Research Centre.

Please review the Guidelines for the complete eligibility requirements.
Eligible Activities
Eligible activities include:
- Core R&D: Experiments involving tests being undertaken to investigate a proposition about something unknown, or the effectiveness of something previously untried. They may take place in a range of settings, from a separate laboratory to a normal production run.
- Supporting R&D: Company activities that support core R&D activities.

As a self-assessment program, applicants are advised to review the Guide to Interpretation and the Online Eligibility Tool to determine eligible activities. New applicants may wish to review the Program Snapshot.

Please review the Guidelines for complete information on eligible and ineligible activities.
Applies to
DocumentationUploaded
GuidelinesSeptember 2016
Fact Sheet - Eligibility of ActivitesSeptember 2016
Registration Information SheetSeptember 2016
Application Notes - Advance Overseas Finding FormSeptember 2016
Application Notes - RegistrationSeptember 2016
List of Research ProvidersSeptember 2016
Use these documents as a guide only - always get the latest direct from the Administrator
Status Open
Start Application 1 May 2015
Opening Date 1 July 2015
Closing Date 31 October 2016
Closing Information
Please see the Overview for the closing details.
Funding Type Tax Offset
Total Funding Pool $3.0B
Requires Co-contribution? No
Competitive No
Location National
Overseas
Industry
General - Non-Industry Specific
Activities
Environment and Sustainability
Innovation and R&D
Manufacturing
Difficulty Rating
Department
Department of Industry, Innovation and Science (DIIS)
Program Administrator
AusIndustry
Telephone 132 846
General Website Visit website
Program Website Visit website
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