Is your business conducting research & development activity? If it is, you should absolutely be looking at the Australian Government’s R&D tax incentive. This programme spurs more companies into conducting R&D, promoting innovation and positive risk-taking – not to mention saving you money in the long run.

However, you have to walk before you can run – and claim. To get your business started on the path to getting the incentive, you have to know how to register.

What do you need to register for the R&D tax incentive

How will your business prepare its R&D registration?
1) Ensure you are the right kind of entity

R&D isn’t for everyone. The Department of Industry, Innovation and Science (DIIS) points out that eligible applicants must be incorporated under Australian law, with exceptions for companies that:

Are incorporated under overseas law, but that are Australian for income purposes.
Come from countries that have double tax agreements with Australia, which much cover a “permanent establishment” definition.
Conduct business in Australia under a double tax agreement.
This means individuals, limited corporate partnerships and entities with full income tax exemptions are not eligible to register.

10 Things to Know About The R&D Tax Incentive
What do you need to register for the R&D tax incentive

Payment for the R&D tax incentive will come to your business in instalments.
2) Register the right kind of activities

You might believe your activity qualifies for R&D tax incentive registration, but in reality it may not perfectly line up with DIIS definitions of core or supporting activity. We have some examples of ways it can go wrong here, while the DIIS has clear definitions of both activities on their site.

Essentially your activity should be based on a scientific model, proceed from hypothesis to experiment, reach logical conclusions, and you must have no way of determining the outcome beforehand. Make sure you have the paperwork to prove your activities are R&D, as well as documentation to back up your expenditure.

3) Register in a timely manner

The R&D tax incentive comes around every year, and you must register your R&D activity on a specific schedule. The Australian Taxation Office (ATO) states that you should list separate activities for every single income year that you’d like to get an offset for.

You also have to register the work within 10 months of the end of the income year in which the activity occurred, and do it before you move forward with claiming the R&D tax incentive.

A slight exception applies for R&D work done before July 1, 2011. As this was the start date for the offset scheme, activities conducted before then (that you can prove with documentation) could still be eligible.

What do you need to register for the R&D tax incentive

Your R&D registration will be subject to a rigorous set of reviews.
4) Account for the review process

Registration doesn’t happen overnight. In most cases, the DIIS must take several steps to verify your R&D activity before applications can be finalised. This can include:

A pre-registration review, in which the DIIS checks for non-compliance.
An education visit, where a DIIS representative may visit you and assist with registration – you could also do this with the Techwitty team.
A registration review, followed by a more thorough desk review if your initial R&D self-assessment needs clarification.
An activity review, which can consist of an on-site evaluation of your R&D activities to ensure they comply.
Following this, you will receive your post-registration findings, and discover if you are officially qualified as an entity who conducts R&D activities. From there, it’s time to start applying for the R&D tax incentive.

Remember – registering for the R&D tax incentive successfully does not guarantee you will receive the offset. However, doing it correctly is the all-important first step on the path to claiming back a significant portion of your expenses. If you need help making sure you’re registered in the right way, speak to the experts at Techwitty. 

R&D Tax Incentive

Work with Professionals on your R&D Tax Incentive Application Today