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Research and Development Tax Incentive


The Research and Development Tax Incentive (R&D Tax Incentive or R&DTI) helps to offset some of the costs you put into eligible R&D, which benefits the wider Australian economy.

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Application detail:

You can apply to register your eligible R&D with the Department of Industry, Innovation & Science within 10 months of the end of your company’s income year. You may then receive a tax offset when you lodge your Company Income Tax Return with the Australian Taxation Office.

 
What do you get?

You may be eligible for a tax benefit to offset some of the cost of your eligible R&D activities. This may be a refundable or non-refundable offset depending on your company.

Who is this for?

Your company needs to be incorporated, pay tax in Australia, and conduct at least one eligible core R&D activity, and incur the minimum eligible expenditure.

Overview


The R&D Tax Incentive is a self-assessment program.

When you self-assess your R&D activities against the eligibility requirements, you need to judge whether your activities meet the legislated criteria.

You need to ensure your application for registration and you claim for the R&D Tax Incentive are correct.

You must provide accurate information to the Department of Industry, Innovation and Science (the department) and to the Australian Tax Office (ATO).

The department (on behalf of Innovation and Science Australia) jointly manages the R&D Tax Incentive with the Australian Taxation Office (ATO). The department manages the registration of R&D activities, and the ATO manages the rules on eligible entities and costs.

Consulting an R&D tax adviser or tax agent to prepare your application for registration and tax offset claim does not guarantee your eligibility.

We may review the activities included in your R&D Tax Incentive claims to ensure they comply with the law during or after your registration. The ATO may also check if the R&D costs you claim are eligible.

Eligibility


What are the eligibility criteria?

To be eligible for the R&D Tax Incentive you must:

  • be a company that is liable to pay income tax in Australia
  • conduct at least one activity that meets the definition of a core R&D activity
  • have eligible R&D expenditure greater than $20,000

You may claim for certain R&D conducted overseas under some circumstances, however you must have an Advanced and Overseas Finding to claim overseas costs.

Eligible R&D activities are 'core R&D activities' and 'supporting R&D activities'. To register, you must have at least one core R&D activity. Supporting R&D activities are optional. The below definitions are extracts from section 355 of the Income Tax Assessment Act 1997.

Eligibility review

The department may conduct checks that registered activities comply with the law after you have registered. Similarly, the ATO may check if the R&D costs being claimed are eligible after registration.

 
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Applying


How do you apply?

To claim the R&D tax offset in your annual income tax return, you must first register your R&D activities under the R&D Tax Incentive. You must register separately for each income year you wish to claim.

Download a new version of the application form each time you apply. The latest form may have new fields. You can pre-fill the form with data from your last application.

Apply for the R&D Tax Incentive now

Use the application for to apply for registration of your R&D activities for the R&D Tax Incentive.

  • Register for the year you want to claim the offset.
  • Within 10 months of your company's income year.
  • Before you lodge your company income tax return.
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Advance and Overseas Findings


You can ask us to make an Advance or Overseas Finding as to whether your activities are eligible R&D activities. If you do not have a positive Overseas Finding, you can’t claim overseas expenditure.

Advance and overseas findings are designed to provide certainty to you about the eligibility of your activities under the R&DTI. They provide a binding determination issued by us as to whether your activities are eligible to be claimed under the program. You will still need to apply to register your R&D activities after an receiving an Advanced or Overseas Finding.

Advance/Overseas Finding Application Form

A positive Advance/Overseas Finding gives you assurance that your registered R&D activities will be eligible for claiming under the R&DTI.

It is also a mandatory that you first obtain an Advance/Overseas Finding for any offshore activities that you will be registering for the R&DTI.

For more information read Key documents: Findings.

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Getting it right


Your R&D Tax Incentive Journey

The Integrity Framework user journey

The Integrity Framework takes into account integrity risk and behavioural factors that influence program participants.

Diagram showing steps in the user journey

Not all situations have been covered in this user journey. There may be other options available, depending on your particular circumstances. AusIndustry works with the Australian Taxation Office on the joint administration of the program, including on compliance activities.

The above User Journey guides you through the steps along your journey and possible interventions you may experience, including if should you be selected for integrity management activities. For more detail on the steps in user journey, view the Steps in the user journey.

Registration does not mean eligibility. We will work with you through a fair, easily understood and transparent process, and ensure regular interactions with you as you navigate your application.

For more information on the user journey, our Service Commitment and Integrity Framework, please view Navigating the R&D Tax Incentive.

Records we expect you to keep

When you apply to register for the R&D Tax Incentive, we expect you to keep records that show your activities meet the eligibility criteria as defined in the law.

We expect that you will keep records at the time you carry out your R&D activities (known as contemporaneous records). These records help you self-assess your eligibility, save you time, and reduce the risk of not being able to prove that your activities are eligible.

You may later make further notes to support your original records. For us, documents created after activities are carried out are generally inadequate on their own.

Compliance readiness guide on record keeping for the R&D Tax Incentive

What is scientific research?

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The Australian Government’s R&D Tax Incentive encourages businesses of all sizes, to generate new knowledge through research and development (R&D). The program offers a generous tax offset for companies investing their time and effort in conducting eligible R&D.

What is a hypothesis and an experiment?

Time: 0

To apply for the R&D Tax Incentive you need to conduct research in a scientific way. The program offers a generous tax offset for companies investing their time and effort in conducting eligible R&D.

Examination of registrations

You are responsible for making sure you meet the eligibility criteria for the program. While it is a requirement to register your R&D activities with the Department each year, receiving a registration number does not mean that your R&D activities are eligible under the Incentive. A business can still be contacted by the Department for education, guidance or compliance engagement.

Your registration (or registrations) may be examined to see if they comply with the eligibility requirements of the program. If your registration is examined, you will be asked to provide records to prove the eligibility of registered activities.

If your registration is examined, you will have 30 days to provide evidence. A further period of up to 14 days may be granted on request in accordance with the Decision-making Principles. 

The examination of your registration may lead to a Finding about the eligibility of all or some of your registered activities. You may need to amend your tax return if any of your registered activities are found to be ineligible.

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Help to get it right

We are committed to supporting innovative Australian businesses. We are here to support you to understand how to apply for and comply with the R&D Tax Incentive program.

If you are currently under review or examination, please contact your case manager. Their details are on the letters we have sent to you or your advisor.

Need help?

Contact us for help with your application or to find out more.

Monday – Friday, 8am – 8pm across Australia

Customer stories


Learn about some of our previous customers and how an R&D Tax Incentive has helped them.

Key documents


Guide to interpretation

Compliance readiness guide on record keeping for the R&D Tax Incentive

Key documents: Eligibility


How should companies group R&D activities

R&D Tax Incentive at a glance

When could scaling-up involve eligible R&D activities

Key documents: Fast facts


100 million dollar threshold registration administrative arrangements

Fact sheet for accountants

Fact sheet on Eligibility of Activities

R&D Tax: what does it offer

Record-keeping and R&D planning

Registration information sheet

Simplified worked examples

R&D Tax Incentive: application notes

Key documents: Findings


Guide to findings

Advance/overseas finding application notes

Overseas findings - How long does an overseas finding last

What does 'not available in Australia' mean