What is the R&D Tax Incentive?

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“All in all, the refreshed guidance is clearer and easier to understand for companies seeking information on the R&D Tax Incentive.”

Alan Baghdasarayan reviews the refreshed guidance for R&D Tax Incentive guide released in November 2020.

The creation of new knowledge, technology and processes are why R&D is at the forefront of the Government’s economic revival. The Research and Development Tax Incentives (R&DTI) is a Federal Government incentive. It provides a tax incentive based on the following 2 tiers.

At a high level:

  • If your company’s annual aggregated turnover is less than $20m. The refundable tax offset is at a rate of 43.5%. 
  • Or if your company’s annual aggregated turnover is above $20m. Then the non-refundable tax rate is 38.5%. 

Do your company’s activities meet the criteria? If so, then your company is eligible to claim the R&DTI. This is a self-assessment program. You must ensure your company’s activities are eligible and fall within legislation guidelines. The eligibility criteria and application process is outlined here on business.gov.au website.

R&DTI Criteria

The criteria to adhere to and the application process is complex. It has legal and binding requirements. It may be worth talking to an expert about the process and application. BridgePoint Group’s expertise in the R&DTI field is led by Alan Baghdasarayan. In November 2020, the Australian Government updated its guidelines. Below Alan outlines the key changes in the refreshed guidance.

  • For software R&D claimants, clearer guidance regarding AusIndustry’s perspective on what is considered internal administration
  • Examples – clearer and more thorough case studies for people to follow to see how the R&DTI can be applied
  • Evidence – comprehensive table of examples of documents that can be kept to support the R&D activities being claimed

Key documents relating to the refreshed Guide to Interpretation are located here. These outline in clear language the interpretation, eligibility, fast facts, record keeping and an information sheet which is a handy reference point for all company’s considering applying for the R&DTI

As mentioned, the process and eligibility for the R&DTI is a complex process, despite the clearer refreshed guide released this week. If you need any assistance or advice, please reach to Alan at BridgePoint Group to utilise his expertise and experience in securing R&D tax incentives for innovative Australian businesses. 

Call us on 1300 656 141 or email Alan directly – Alan@bridgepointgroup.com.au

 

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