R&D Tax Incentives - Important Reminder

Written on the 8 March 2013

With a 45% refundable tax offset (equivalent to a 150% deduction) up for grabs it’s a wonder why more businesses don’t claim the R&D Tax incentive.  This generous tax deduction is available to businesses with a turnover below $20 million (a 40% tax offset, equivalent to a 133% deduction is available to all other eligible entities).

Let’s say your business makes organic fertilisers. Your annual turnover is $10 million but has a tax loss.  The company has spent $1 million on research and development in 2011/2012. Assuming the research and development undertaken by the business meets the criteria, the organic fertiliser business will receive a refund of $450,000 when it lodges its 2013 tax return.

But, there are a couple of things you need to do first.  You need to apply to access the R&D Tax Incentive through AusIndustry before 30 April 2013.  Once AusIndustry processes the registration, a number is issued that will be disclosed on the company tax return. The business’s tax return cannot be lodged before the claim is made.