Are you a business investing in innovation? The Australian Taxation Office (ATO) offers a Research and Development (R&D) Tax Incentive that could significantly boost your cash flow.
Let’s break down the basics of this ATO R&D tax incentive program.
What Is the R&D Tax Incentive?
The R&D Tax Incentive is a government program that encourages companies to conduct eligible research and development activities. It provides a tax offset, reducing your company’s tax liability or providing a cash refund for eligible entities.
Who Is Eligible?
To be eligible for the ATO R&D Tax Incentive, your company generally needs to:
- Be a company incorporated in Australia or a foreign company with a permanent establishment in Australia;
- Be conducting eligible R&D activities; and
- Have incurred at least $20,000 in eligible R&D expenditure (unless you use a Research Service Provider).
What Activities Qualify?
Eligible R&D activities generally fall into two categories:
- Core R&D Activities: These are experimental activities undertaken to create new knowledge or improved materials, products, devices, processes, or services. They must involve a hypothesis, experimentation, observation, and evaluation.
- Supporting R&D Activities: These are activities directly related to the core R&D activities.
Examples of potentially eligible activities include:
- Developing new software or improving existing software with scientific or technological uncertainty.
- Experimenting with new materials or manufacturing processes.
- Conducting trials to test a new product or technology.
The ATO’s R&D tax incentive program helps businesses drive innovation and contribute to research.
Need Assistance for Your ATO R&D Tax Incentive Needs? Contact Us!
R&D Assist is here to provide consultation and assistance regarding claiming, lodging and understanding research and development tax incentives. Don’t hesitate to contact us today to get started.