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What is R&D Tax Incentive Finance?

October 13, 2016 | Author: | Posted in Taxes

The government of Australia along with the AusIndustry; has some initiatives to promote research and development oriented businesses. The projects which work solely on research and advancement of technology are required for the strong economic growth of the country. To facilitate this growth, the government has initiated the R&D tax credit facility through which these businesses can benefit from the R&D tax incentive finance.

What is R&D Tax Credits?

The R&D tax credit is a scheme introduced by the government to help the business units that are working on Research and Development activities. This facility can be availed by SME (Small and Medium Enterprises) or by large industries. If your business is R&D related, then your expenses will be very high. Also the risk involved is higher in running such business. Hence to encourage good research, the government has introduced a scheme called as the R&D Tax Credit. As the name suggests, it is a credit that your business unit could avail from the government. The money that you spend in research activities – like staff cost, material costs, software costs and the cost incorporated in hiring contractors can be covered with the R&D tax incentive finance.

Are you eligible to avail the credit?

There are some set terms and conditions for your business to avail the R&D tax incentive finance. The R&D Tax credit scheme is applicable for companies that produce outputs in the domain of technology, medical sciences, new machines, prototypes, new software etc.

•  Your company should be regular payee of the CT (Corporate Taxes).

•  The research project should be part of your current business and your business should be oriented to improve processes, stability, safety or quality of life of the world. Meaning it should be helpful to the larger section of the society.

•  Your project should be working extensively on research of some uncertainties in the technology then you can avail this facility provided you present a document stating the uncertainties that are faced and how your research is working towards overcoming the problems.

These are some criteria for which your business would not qualify for the R&D Tax Credit :

–  If your company is developing commercial products like software – you do not qualify for this; even though it helps the larger masses.

–  Projects working on arts, economics, social sciences and humanities do not qualify for this credit.

What is the process of availing R and D Tax Credits?

Once you know that you are eligible for this credit, availing the R&D tax incentive finance is a simple process. You need to fill in the details in the CT (Corporate Tax) return form. It is necessary that you mention if your company is a SME or a large company in your CT return to avail this facility. You need to provide a technical write-up at the time of filing for the same. The technical write-up should include details of the project, the number of persons involved, their contributions and it should also have details about the day to day monetary transactions.



Swanson Reed, a R&D tax advisory firm in Australia, helps companies involved in research and development activities claim R&D tax incentive that provide tax credit funding strategy and R&D Tax Finance ( ). To learn more about us, visit

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