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R&D tax incentive

Jennifer Palmer - Aug 2013

Companies with a turnover of less than $20 million that are undertaking research and development (R&D) may receive an uncapped, fully-refundable offset if they are in tax loss.

From 2014, eligible companies will also be able to receive refunds as quarterly credits.  This will help improve cash flow and allow more investment in R&D.

R&D incorporates developing new or improved products, processes, devices, materials and services, or overcoming technical problems. It also includes funding or creating new knowledge, or expanding on existing knowledge to provide a technical solution.

There are two core components of the incentive:

  • A 45 percent refundable tax offset (equivalent to a 150 percent deduction) to eligible entities with an aggregated turnover of less than $20 million per annum.
  • A non-refundable 40 percent tax offset (equivalent to a 133 percent deduction) to all other eligible entities.

For more information, visit ATO R&D Tax Incentive

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