R&D tax incentives

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 Aus. Industry before 30 April 2013.  Once Aus. Industry 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.

The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.

Source: Knowledge Shop (March 2013)