The Australian R&D Tax Incentive helps eligible companies by providing a tax offset for some of the cost of research and development activity.
For startups, growing companies and small to medium businesses, the refundable offset may be especially relevant where the company has invested in technical development but is not yet profitable.
This guide gives a quick overview of the R&D Tax Incentive and helps you decide whether your company’s work may be worth checking.
The R&D Tax Incentive is an Australian Government program for companies undertaking eligible research and development activities.
It is not limited to laboratories or academic research. Eligibility depends on the company, the activities performed, the costs incurred and the records available.
You may be eligible if you are…
Your company may be undertaking R&D if it is trying to solve a technical problem where the answer is not obvious from existing knowledge, standard practice or ordinary troubleshooting.
R&D may involve testing, trialling or comparing different technical approaches to see whether a desired outcome can be achieved.
Product development may involve R&D where the company is experimenting with design, performance, materials, software, formulation or production methods to achieve something technically uncertain.
Your company may have R&D activity worth reviewing if the work involved:
Not every development project qualifies. The key questions are whether the work involved eligible R&D activities and whether the company can support the position.
For eligible companies, the R&D Tax Incentive may provide either a refundable or non-refundable tax offset.
The refundable offset can be relevant for smaller companies because it may result in a cash refund where the offset is greater than the company’s income tax liability.
The outcome depends on turnover, tax position, eligible R&D expenditure and whether the activities meet the program requirements.
Industry alone does not determine eligibility. The specific activities, uncertainty, experiments and evidence are what matter.
R&D activity may arise across many industries, including:
If your company has spent money on technical development, experimentation or product improvement, it may be worth completing a short eligibility check.
The check is designed to help identify whether your R&D work and related expenditure may be suitable for further review.
General information only. Not a government website. Eligibility depends on your company, activities, expenditure and records.