Adequately assessing a potential R&D claim at the beginning is one of the most important parts of the R&D claim process.
In Australia, there are two main R&D Tax Offsets available to companies:
R&D activities need to meet certain legislative requirements for them to be deemed eligible ‘core’ activities by AusIndustry. The basic 3 requirements of a ‘core’ activity are illustrated in the below flowchart.
|No Claim||38.5% R&D Tax Offset||43.5% R&D Tax Offset|
|Deduction/ R&D Spend||($100)||($100)||($100)|
|Deductions Claimed/ Forfeited||$100||—||—|
|Gross Tax (30%)||(30%)||(30%)||(30%)|
|R&D Tax Credit||—||$38.50||$43.50|
|Net Tax Payable||($30)||($30)||($30)|
|Benefit yield of R&D Spend||8.5%||13.5%|
AusIndustry undertakes periodic reviews of R&D activities and the documentation used to substantiate those activities. The below industry specific checklists contain some of the information AusIndustry may review or request in the event an activity assessment is undertaken.