R&D Tax Concession
The research and development tax concession is an ongoing scheme designed to increase the level of research and development being conducted by Australian companies. It is broad-based, not industry specific and market-driven with the applicant entity deciding upon the scope and timing of the research and development.
It enables companies to deduct up to 125% of eligible expenditure incurred on R&D activities from assessable income when lodging their income tax returns. For expenditure that qualifies for the 125% concession (excluding plant related expenditure), an additional 50% deduction called the ‘175% premium R&D tax concession’ may be available. It is available to those companies that increase their level of this type of R&D expenditure relative to their average of such R&D expenditures over the previous three years. Grouping and other rules apply. Companies can claim the premium for their years of income that commence after 30 June 2001.
An ‘R&D cash rebate’ (equivalent to the value of the R&D tax concession) is available to companies with an annual turnover of less than $5 million and whose aggregate R&D amount is more than $20,000 and less than $1 million per year. These threshold tests are also subject to grouping rules. Eligible companies can elect to receive the offset of 30 cents for each dollar that would otherwise have been claimable as a deduction as a cash refund to the business or an offset against any tax owing.
Source: ATO
Services MPR Provide
We work with some of Australia's companies developing leading edge technology and venture capital providers in the areas of:
- Assessing your eligibility
- Review and advice in relation to your R&D plan
- Preparation of detailed calculations to support the R&D costs
- Preparation and lodgement of the AusIndustry R&D tax concession application
- Preparation of the ATO R&D tax concession schedule required to be lodged with the company’s annual income tax return.
