- a 45% refundable tax offset for entities with turnover under $20 million (and not controlled by a tax exempt entity), or
- a 40% non-refundable tax offset for all other eligible entities.
The tax incentive is equivalent to a 150% deduction for smaller businesses, and a 133% deduction for all other entities.
To be eligible you must be a company which conducts:
- core R & D activities: experimental activities whose outcomes cannot be known or determined in advance on the basis of current knowledge, information or experience, and are conducted for the purpose of generating new knowledge;
- supporting R & D activities: an activity that is directly related to core R & D activities or has been undertaken for the dominant purpose of supporting core R & D activities.
The amount of the expenses related to R & D activities must total at least $20,000 for the year.
To be eligible for the R & D Tax Incentive, companies must register their R & D activities with AusIndustry within 10 months of the end of the company’s income year. For most companies this will be by 30 April 2013 for the year ended 30 June 2012.
To assist companies, AusIndustry has recently released a publication on registration requirements to help inform companies on what is needed for registration.
The approved application form to be released in June 2012 will be a SmartForm, which will help applicants navigate questions that are relevant to their circumstances.
Claiming the R & D Tax Incentive
The incentive is claimed back through the company’s tax return for the year. This means that the new R & D Tax Incentive will be claimed back through the 2012 tax return (when released by the ATO).
To complete the claim schedule, the company will need its unique registration number obtained from AusIndustry before being able to claim the incentive.
Specific R & D records
As the application to AusIndustry, and the claim through the tax return, are through self-assessment, it is vitally important that adequate records are kept to verify both the amount of the expenses incurred towards the R & D activities, as well as details of the nature of the activities carried out.
If in any doubt, speak to Value Beyond and make sure you maximise the claim you are entitled to!