What is my company entitled to?

R&D entities with an aggregated turnover of less than $20 million are eligible for a refundable tax offset, which is 18.5 percentage points above the company’s tax rate, which typically equals to 43.5%. If this tax offset exceeds the entity’s tax liability, the remaining balance is paid to the entity in cash.

For R&D entities with an aggregated turnover of $20 million or more, the non-refundable tax offset is set at the company’s tax rate plus 8.5 percentage points for R&D expenditure up to 2% of R&D intensity, and 16.5 percentage points for the portion of R&D expenditure above 2% R&D intensity. R&D intensity is defined as the portion of the company’s total expenditure that qualifies as R&D expenditure.

How does the process work?

The R&D claiming process involves several critical steps, including technical and scientific writing, identifying core R&D activities, and supporting R&D activities. At GWN Consulting, we help you identify and articulate these activities, ensuring they align with the legislative criteria outlined in the Income Tax Assessment Act 1997, Division 355. Additionally, the process requires detailed documentation of R&D expenditure, which is essential for substantiating your claim.

The benefit of claiming R&D incentives comes with a rigorous regulatory regime, including review and audit activities conducted by the ATO and AusIndustry. Claimants must focus on a thorough eligibility assessment and substantiation of their claims to comply with these stringent requirements. Our expertise ensures that your claims are robust, accurate, and compliant with all regulatory standards, giving you confidence in your R&D tax incentive application.

What activities would be considered eligible?

Core R&D activities are defined as experimental activities:

(a) whose outcome cannot be known or determined in advance on the basis of current knowledge, information, or experience, but can only be determined by applying a systematic progression of work that:

(i) is based on principles of established science; and

(ii) proceeds from hypothesis to experiment, observation, and evaluation, and leads to logical conclusions; and

(b) that are conducted for the purpose of generating new knowledge (including new knowledge in the form of new or improved materials, products, devices, processes, or services).

However, this definition is broad and subject to inclusions. At GWN Consulting, we analyse your activities to determine whether they are eligible for this offset based on recent taxpayer alerts, previous case studies, and legislative changes. Our thorough approach ensures that your R&D activities align with the requirements set out in the Income Tax Assessment Act 1997, Division 355 and Industry Research and Development Act 1986, so your company can confidently claim your R&D tax incentive.

What expenses can my company claim?

R&D entities must incur at least $20,000 in R&D expenditure to be eligible for the R&D tax incentive. Eligible expenditure includes salary and wages, contractor costs, trial expenditure, direct costs such as raw materials, and depreciation on plant and equipment. At GWN Consulting, we take a comprehensive approach to ensure that all eligible expenditures are properly claimed. By aligning with ATO best practices, we ensure that your claim is maximised and fully compliant, giving you the assurance that you are receiving the maximum benefit from your R&D activities.