What is the Research and Development (R&D) Tax Incentive Application

The Research and Development (R&D) tax incentive is a government program designed to encourage companies to conduct research and development benefiting Australia, by providing a tax offset for eligible R&D activities. The R&D Tax Incentive program has two core components:

  1. a 43.5% refundable tax offset for eligible entities with an aggregated turnover of less than $20million per annum, provided they are not controlled by income tax exempt entities.
  2. a 38.5% non-refundable tax offset for all other eligible entities (unused offset amounts can be carried forward to future income years).

The rate of the R&D tax offset is reduced to the company tax rate for that portion of an entity’s notional R&D deductions that exceed $100 million for an income year.

Broadly speaking, your eligibility to claim R&D tax offsets will depend on whether or not your company is an R&D entity and, if yes, whether or not you have incurred notional deductions of at least $20,000 on eligible R&D activities.


What are eligible Research and Development (R&D) activities?

Core R&D activities are “experimental activities whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience, but can only be determined by applying a systematic progression of work that is based on principles of established science; and proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions that are conducted for the purpose of generating new knowledge”.


Supporting R&D Activities are ones that are “directly related to core R&D activities or, for certain activities, has been undertaken for the dominant purpose of supporting core R&D activities. Activities that must satisfy the dominant purpose requirement are those that produce – or are directly related to producing – goods or services; or are excluded from being core R&D activities”.

Techwitty can prepare and submit your entire application at no cost, and will only charge a small percentage success fee if you are successful in receiving a rebate.

So, if you are uncertain about your eligibility for R&D Tax Incentive or would like a free no obligation eligibility assessment please contact Techwitty and our R&D Tax experts will be happy to assist you.

R&D Tax Incentive