R&D Tax Incentive

Am I an eligible R&D Tax Incentive entity?

An eligible entity must be either:

What’s more, an eligible applicant must essentially bear the risks and own the results of the research and development activities. And note that the research and development activities should be conducted for your business (rather than for another entity).

Are my activities eligible for the R&D Tax Incentive?

The first question is whether your R&D activities are conducted in Australia or overseas. All eligible activities conducted in Australia qualify for the R&D Tax Incentive. Overseas activities might be eligible, but there are conditions which must be met when it comes to R&D tax.

To be eligible, all R&D activities must be either Core R&D Activities or Supporting R&D Activities.

Core R&D Activities

These are experimental research and development activities:

• whose outcome cannot be known or determined in advance based on current knowledge, information or experience, but can only be determined by applying a systematic progression of work that is based on principles of established science; and
• proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions

Put simply, you must be seeking to gain new knowledge in the field by experimenting.

Core R&D Activities are conducted for generating new knowledge (including improved materials, products, devices, processes or services). It is worth noting that some types of activities are specifically excluded from being Core R&D Activities.

Supporting R&D Activities

These activities are directly related to Core R&D Activities or are undertaken for the dominant purpose of supporting Core R&D Activities. As an example, gathering data to build a database which will support your testing could be eligible for the R&D Tax Incentive.