The eligibility rules for the R&D Tax Incentive program can be complicated but for the majority of potential applicants if you can answer YES to these four questions you will be eligible:
- You are an Australian company;
- You are in business to make money (not for profit organisations cannot claim);
- You are carrying out eligible R&D activities; and
- You have spent at least $20,000 of eligible expenditure on your eligible R&D activities.
There are a few other instances where you may be eligible and these are:
- You are a company incorporated in a foreign country that is either an Australian tax resident or has a permanent establishment in Australia and your resident country has a double tax agreement with Australia;
- You are a body corporate acting as a trustee of a public trading trust; or
- You are an eligible entity and have spent less than the requisite $20,000 BUT the money was paid to a Research Service Provider (registered under the IR&D Act) OR to a Co-operative Research Centre.
There are more rules for consolidated groups and R&D partnerships and if you fall into either of these groups it would be best to contact us to clarify your situation.
Eligible expenditure includes normal costs associated with undertaking your eligible R&D activities such as wages, contractors, depreciation and so on. Some expenses are deemed ineligible under the R&D Tax rules and these include interest, core technology, depreciating asset purchases and buildings among others.
Please feel free to contact us for more information here or for a comprehensive evaluation using our free, anonymous self-assessment test click on the big blue button to the right.