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R&D Tax Incentive
Program ID: 6369
Overview
This program is a broad-based, market-driven assistance for all industries which provides a targeted tax offset to encourage more companies to engage in R&D.

It aims to:
- Boost competitiveness and improve productivity across the Australian economy.
- Encourage industry to conduct R&D.
- Provide business with more predictable, less complex support.
- Improve the incentive for smaller firms to engage in R&D.

The core components of the incentive are:
1. For income years from 1 July 2016:
- A 43.5% refundable tax offset for companies if they have an annual turnover of less than $20 million. This tax offset is available to companies that are not controlled by tax exempt entities.
- A non-refundable 38.5% tax offset for all other eligible companies. Unused non-refundable offset amounts may be able to be carried forward to future income years.

2. For income years before 1 July 2016:
- The refundable offset rate is 45%.
- The non-refundable offset rate is 40%.

Additional benefits include:
- The option to gain certainty about the eligibility of the R&D activities through an Advance Finding.
- Some overseas R&D activities are claimable (certain conditions apply).

Companies can claim up to $100 million a year for R&D expenditure. If the company's R&D expenditure is more than $100 million in a year, amounts claimed above $100 million may attract a non-refundable offset at the company tax rate.

Subject to eligibility criteria and exclusions, a company can generally claim a tax offset for:
- Expenditure incurred on R&D activities.
- Decline in value of depreciating assets used in R&D activities.
- Balancing adjustments for depreciating assets used only in R&D activities.

The deadline for lodging an application for registration is 10 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.
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 R&D activities:
- Must have at least one core activity.
- Can have multiple supporting activities for each core activity.
- Must meet the legal definition of core and supporting activities.
- Must be based on the principles of established science.
- Must be seeking to answer a technical or scientific unknown.

Please review the Eligibility of Activities Factsheet for the legal definitions of core and supporting activities.
Applies to
DocumentationUploaded
Program OverviewOctober 2016
Customer Information GuideOctober 2016
Eligible ActivitiesOctober 2016
Record-Keeping and R&D PlanningOctober 2016
Registration Information SheetOctober 2016
Registration Application NotesOctober 2016
Advance Overseas Finding Application Notes October 2016
Guide to InterpretationOctober 2016
Guide to FindingsOctober 2016
List of Research ProvidersOctober 2016
Simplified Worked ExamplesOctober 2016
Compliance Readiness - The importance of record keepingOctober 2016
Compliance Readiness - Risk reviews and findingsOctober 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 30 April 2017
4 months to go
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 and Australian Tax Office (ATO)
Telephone 132 846
General Website Visit website
Program Website Visit website
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