The Australian 43.5% R&D tax offset is available to some foreign companies who undertake R&D in Australia.
Foreign entities may be eligible where they have setup:
The amount that a foreign entity can claim through the R&D Tax Incentive depends on the turnover of the company and whether it has recorded a profit or loss in the financial year in which it claims. The benefits range from a tax reduction of 10 cents for every dollar spent on R&D for profitable companies who turn over more than $20 million, to a cash refund of 43.5 cents in every dollar spent on R&D for companies in loss who turnover less than $20 million. The following table provides a more specific overview:
Condition | Requirement |
Group Turnover | Less than $20 Million |
Tax Position | Australian Company is in Tax Loss |
Benefit | 43.5 cents in the dollar refund |
Example 1:
Example: | Expenditure |
Company J’s R&D expenditure | $100,000 |
Company J’s R&D Tax Incentive Benefit | $43,500 Cash Refunded to Company J |
Requirements for setting up an Australian Company
Foreign companies will need to set up an Australian company, and expect the following:
If you are a foreign entity interested in claiming the R&D Tax Incentive in Australia and applying for Research and Development grants, contact us to determine your eligibility and discuss your options.