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Deadline Approaching for Lodgement of Overseas Findings for R&D Activity First Conducted in FY25

Companies seeking to claim expenditure for overseas activity incurred by an Australian company under the R&D Tax Incentive must apply separately to claim these costs by first lodging an Overseas Finding Application with AusIndustry.

In addition to general eligibility criteria, there are specific and extensive rules to determine whether expenditure on overseas activities is eligible under the R&D Tax Incentive.

Generally, expenditure incurred by Australian companies on R&D activities conducted overseas can only be eligible for the R&D Tax Incentive where:

1. The activity to be conducted overseas has a ‘significant scientific link’ to one or more core R&D activities that are conducted or to be conducted solely within Australia.
2. The expenditure on overseas activities is less than expenditure on Australian Core and Supporting Activities.
3. The overseas activity cannot be conducted within Australia for reasons outlined within the R&D Tax Legislation (generally, contravention of Australian laws or restricted access to expertise and natural features).
4. An overseas finding applicable is lodged, and then approved.

This time of year, it is important to note:

• Companies must submit an application for an Overseas Finding before the end of the first income year in which you conduct, or plan to conduct, the activity.
• An Overseas Finding Application for an overseas activity first commenced during FY25 must be lodged by 30 June 2025 if a company has a standard year;
• Due to the design of the law and the IR&D decision making principles, AusIndustry cannot accept late Overseas Findings Applications or grant extensions of time to apply for a finding under any circumstances.

Overseas Finding Applications have been known for requiring a lot of information and supporting evidence, and can be very time consuming to collate.

AusIndustry has however sought to streamline processes in recent years, and we have anecdotally noted that Overseas Findings Applications lodged in the FY22 to FY24 periods seemed to be processed fairly efficiently when compared with processing of findings in prior years.

Given the magnitude of work involved and the inability to attain any extension, companies seeking to lodge Overseas Findings Applications for the YE 30 June 2025 (FY25) should be well underway in collating their applications for lodgement by the deadline.