Companies undertaking R&D – report deadline 30 April

Companies which have a 30 June financial year and undertook R&D activities in 2022/23 have to lodge their R&D Tax Incentive application with AusIndustry by 30 April 2024.

This summary requires significant information to be lodged relating to R&D activities undertaken in 2022/23 FY, and the company is proposing to claim the R&D rebate in its taxation return.

For companies with turnovers under $20M, this rebate is 43% of the legitimate R&D expenditure.

If the company is trading at a loss, the Directors can elect to receive the value of the rebate as a cash refund subject to the company’s losses, exceeding the value of the R&D rebate.

If the company’s turnover is over $20M, the non-refundable R&D tax offset is the company’s corporate tax rate plus an incremental premium.

The premium increments are based on the company’s R&D intensity. The intensity is a percentage of the companies’ eligible R&D expenditure as a proportion of the company’s total expenditure for the year.

All eligible R&D expenditure up to 2% intensity will receive a non-refundable R&D tax offset equal to the company’s corporate tax rate +8.5% premium.

Where the companies’ intensity is above 2%, the tax offset is the company’s corporate tax rate +16.5%.

The application requires details to be submitted of each R&D project, with confirmation that the company has maintained a complete record of work undertaken together with the costs of that work and that these records are available for audit if required.

Project plans which show the objectives of the project – prior art searches conducted – new knowledge intended to be produced – confirmation that the outcomes could not have been known or determined in advance – details of professionals that have assisted in the work – identification of the hypothesis or hypotheses that were utilised in the project all have to be shown.

The Board of Directors minutes approving the undertaking of individual R&D activities should be referred to.

The details of the planning of the ‘systematic progression of work’, starting with prior art searches – core activities – what was the strategy for the ‘generation of new knowledge’ – experiments to be undertaken should be included.

A summary of the results of the experiments that have been undertaken for the individual R&D projects should be disclosed.

Towers Business Development can assist with the R&D process. To find out more, contact us on 1800 232 088 or email .