Updated November 12th 2013

The new Research and Development (R&D) Tax Incentive scheme received Royal Asset in September 2011 and will apply from 1 July 2011. The R&D Tax Incentive has two core components:

  • A 45% refundable tax offset to eligible entities with aggregated turnover of less than $20 million
  • A 40% non-refundable tax offset for all other eligible entities. Any unused offset may be carried forward for use in future income tax years

Within the new scheme the definition of R&D activities has been amended and it splits costs into two categories as follows:

  • Core R&D Activities – which are experimental activities where the outcome is not known and the work is conducted in a systematic process for the attainment of new knowledge. The creation of new knowledge can include new or improved materials, products, devices, processes or services.
  • Supporting R&D Activities – must be support services that are directly related to the core R&D activities and must have a dominant purpose of supporting these activities

There is no upper limit on expenditure that can be claimed through the R&D Tax Incentive provided that all expenditure and R&D activities qualify under the rules. A new guide for claiming the R&D Tax Incentive should be available from AusIndustry early in the new year but until then, please speak to your CIB contact if you have further questions.