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R&D Cash Incentives For Your Business

So what does R&D mean? R&D is short for research and development. However the R&D tax breaks in Australia are not just for lab coat businesses. They are open to all industries of all sizes and cover most “smart” ideas that your company is undertaking every day.

The benefits of R&D tax breaks are also much greater than you may think. Instead of a small additional tax deduction that doesn’t impact companies, particularly those in a tax loss situation, you may be entitled to a huge 43.5% refundable (CASH) tax offset for every $1 that is an eligible R&D expense.

For example:
Spend $100,000, get back up to $43,500
Spend $1,000,000, get back up to $435,000
Spend $10,000,000, get back up to $4,350,000

Expenses that can be eligible R&D and that you can receive a tax offset on include:
– wages (internal and external contractors)
– consumables and materials
– the costs of operating computers, equipment and machinery
plus much more including admin costs.

Making an R&D tax claim usually follows this order:
1) Undertake eligible R&D activities and incur expenditure
2) After the end of the financial year, add up total expenditure claim
3) Register eligible R&D activities with AusIndustry within 10 months after year end
4) After receipt of Registration Number from AusIndustry, claim expenditure in Company Tax Return (in R&D Tax Schedule)

Making an “R&D tax claim” does not necessarily mean hours of additional paperwork and effort. Simply record your activities and your expenditure as you go and at the end of the financial year you will be ready to submit your claim.

There are several pages of eligibility criteria that need to be ticked off, but if you can say yes to the following, then it is definitely worth following this up:

  • must be a registered Australian Company
  • must be creating a new or improved product, device, material, process or service (or acquiring new knowledge)
  • must be undertaking experimental activities ie designs, trials, testing

Who can claim R&D Tax Breaks?


What are R&D Tax Breaks?

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Claiming R&D sounds too hard?

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How do I get Started?

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