The R&D Tax Incentive is Australia’s premier initiative to support businesses investing in the future of innovation.
Answer our short questionnaire to see if you’re eligible for R&D Tax Incentives.
Unlock Your Share of $11.2 Billion in R&D
The Australian Government's Research and Development (R&D) Tax Incentive is a pivotal program designed to encourage business innovation by providing tax offsets for eligible R&D activities. However, the intricate compliance requirements and contemporaneous documentation standards set by AusIndustry and the Australian Taxation Office (ATO) can present some challenges.
At GWN Consulting, we are subject matter experts dedicated to navigating the complexities of the R&D Tax Incentive. We specialise in qualifying whether your business meets the both the legislative requirements and key regulatory guidance , ensuring robust claims. Our meticulous approach ensures your claims are compliant and align with the ATO's and AusIndustry's requirements.
We pride ourselves on keeping our finger on the pulse of the dynamic regulatory landscape, providing a proactive approach to keep our clients informed of changes and opportunities.
By partnering with GWN Consulting, you can confidently leverage the R&D Tax Incentive to fuel your innovation and accelerate your business growth. Our commitment to excellence ensures your peace of mind, allowing you to focus on advancing your business's innovative capabilities.
Sector-specific Expertise
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From precision farming technologies to sustainable crop solutions, we identify and substantiate eligible R&D activities that advance agricultural innovation.
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Supporting innovations in food processing, alternative proteins, and sustainable food systems, we ensure your R&D claims reflect the complexity of this evolving sector.
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Whether it's cutting-edge drug development, diagnostic tools, or gene therapy research, our team navigates the stringent documentation requirements for life sciences R&D.
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From renewable energy advancements to innovative mining technologies, we help businesses drive sustainability while maximising R&D benefits.
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Supporting advancements in construction technologies, green buildings, and smart infrastructure, we ensure claims align with the latest industry innovations.
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With expertise in advanced manufacturing processes and circular economy initiatives, we align your R&D activities with compliance standards and sector priorities.
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Guiding innovations in aerospace technology, advanced materials, and defence systems, we provide expert support for this critical sector.
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From AI and machine learning to cybersecurity and enterprise solutions, we help software innovators claim R&D benefits with confidence.
At GWN Consulting, our team of specialists leverages in-depth industry knowledge to deliver customised, compliant R&D Tax Incentive claims that align with your strategic goals. Whatever your sector, we’re here to help you turn innovation into impact.
Historical Overview
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The origins of the R&D Tax Incentive date back to 1985, when the Australian Government introduced the R&D Tax Concession. This program was designed to encourage businesses to undertake R&D by providing a 150% tax deduction on eligible R&D expenditures.
Key Features:
Simple framework targeting broad industries.
Focused on encouraging private sector investment in R&D.
Included an enhanced deduction rate to stimulate R&D investment.
This early program positioned Australia as a forward-thinking economy, but concerns arose over compliance and the effectiveness of ensuring additionality (i.e., whether the program was driving new R&D or subsidising existing activities).
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In the 1990s, the concession was scaled back due to budget constraints. By 1996, the deduction rate was reduced to 125%, and efforts were made to tighten eligibility criteria to ensure that government support was directed towards genuine, high-value R&D activities.
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In 2011, the Australian Government replaced the R&D Tax Concession with the R&D Tax Incentive under the Income Tax Assessment Act 1997 (ITAA 1997). This significant reform aimed to address criticisms of the concession scheme, such as inequitable distribution of benefits and limited impact on innovation.
Key Features of the 2011 Incentive:
Refundable tax offset of 43.5% for eligible entities with an aggregated turnover of less than $20 million.
Non-refundable tax offset for larger entities, calculated as 8.5% above the corporate tax rate for R&D intensity below 2% and 16.5% above the corporate tax rate for R&D intensity above 2%.
Broader eligibility for activities, emphasising the need for 'core R&D activities' and 'supporting R&D activities' as defined under the legislation.
Introduction of the requirement for documentation demonstrating the nexus between claimed activities and eligible R&D.
This marked a pivotal shift towards a more targeted, outcome-driven approach, focusing on additionality and compliance with the overarching objectives of driving innovation.
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From 2015 onwards, the R&D Tax Incentive underwent significant adjustments to tighten compliance, improve governance, and address concerns about misuse:
2015-16 Review of the R&D Tax Incentive:
The Government commissioned a review led by the Ferris, Finkel, and Fraser Panel to assess the program's effectiveness.
Recommendations included the introduction of a R&D intensity threshold, stricter eligibility criteria, and more stringent compliance measures.
2018 Budget Reforms:
Reforms introduced a cap of $4 million on refundable offsets to small entities (excluding clinical trials).
Adjusted the non-refundable offset to include a R&D intensity measure, aligning benefits with the proportion of R&D spend relative to total business expenditure.
Compliance Crackdowns:
Both the Australian Taxation Office (ATO) and AusIndustry increased scrutiny on claims, emphasising record-keeping, evidence of experimentation, and adherence to statutory definitions of core and supporting R&D activities.
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The R&D Tax Incentive has continued to evolve to balance government support for innovation with fiscal responsibility:
2021 Enhancements:
Simplified access for smaller companies to ensure continued participation by innovative start-ups and SMEs.
Increased funding for compliance and enforcement activities to maintain program integrity.
Modernisation Efforts:
Greater emphasis on digitisation, such as the use of online portals for registration and claim submission.
Clearer guidance materials released by AusIndustry and the ATO to assist businesses in understanding compliance requirements and activity eligibility.
Focus on High-Impact Areas:
Specific industries such as clean energy, advanced manufacturing, and biotechnology have seen increased alignment with national priorities under the R&D Tax Incentive.
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Eligibility: Businesses conducting eligible core and supporting R&D activities in Australia.
Refundable Offset: Available for small businesses with an aggregated turnover under $20 million, providing a 43.5% effective refund rate.
Non-Refundable Offset: For larger businesses, linked to R&D intensity and incentivising companies with higher R&D-to-expenditure ratios.
Governance: A collaborative oversight approach by AusIndustry and the ATO, ensuring compliance through audits, reviews, and detailed record-keeping requirements.
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The R&D Tax Incentive has matured significantly since its inception in 1985. From a simple deduction-based program to a targeted, compliance-driven framework, it now serves as a vital mechanism for supporting Australia’s innovation ecosystem. Its evolution demonstrates the government's commitment to balancing fiscal prudence with the need to foster cutting-edge research and development.
GWN Consulting is proud to be at the forefront of this ever-evolving landscape, helping businesses navigate the complexities of the program, remain compliant, and unlock the full potential of their R&D investments.
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