Research and development tax incentive calculator: About

August 19th, 2014

This calculator helps you calculate your research and development (R&D) tax offset claim.

The research and development (R&D) tax incentive provides a targeted tax offset to encourage certain companies (R&D entities) to conduct R&D activities that benefit Australia.

It provides generous benefits for companies performing eligible R&D activities and has the following two core components:

  • a 43.5% refundable tax offset for eligible entities with an aggregated turnover of less than $20 million – unless they are controlled by tax exempt entities.
  • a 38.5% non-refundable tax offset for all other eligible entities.

To claim the R&D tax offset each year, you must complete the Research and development tax incentive schedule and a company tax return.

Before using the calculator, make sure you have worked out:

  • the amount of notional R&D deductions that have been entered at item 6 in the company tax return and will need to be ‘added back’ to ensure you don’t over claim your deductions
  • the total amount of expenditure incurred to associates, even if it has not been paid (as it is not eligible to be claimed as a notional R&D deduction)
  • the total amount of expenditure incurred to associates that has been claimed under other provisions
  • if you have exempt entity ownership of 50% or greater
  • all entities that you are connected or affiliated with
  • the annual turnover amount of the claimant company and each connected or affiliated entity
  • any amount excluded from aggregated turnover under subsection 328-115(3) of the Income Tax Assessment Act 1997 (ITAA 1997)
  • if you are required to make a feedstock adjustment in the claim year for one or more marketable products, and if so, determined the following for each marketable product
    • market value of the marketable product
    • cost of producing the feedstock output
    • cost of producing the marketable product
    • expenditure in one or more years in acquiring or producing goods or materials (feedstock inputs)
    • cost of energy input directly into the transformation or processing
    • decline in value of assets used in acquiring or producing the inputs to the R&D activities.
  • if you have obtained a recoupment (including a grant) related to expenditure notionally deducted under the R&D tax incentive, and if so determined the following for each recoupment
    • type of recoupment (grant or reimbursement of expenditure)
    • amount of the recoupment
    • R&D expenditure related to that recoupment
    • if the recoupment is a reimbursement of project expenditure, the total amount expended on the project.

Attach your completed R&D tax incentive schedule to your company tax return, ensuring you transfer all amounts to the company tax return (as directed on the R&D tax incentive schedule).

Click here for more information on the R&D tax incentive calculator 2014.