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R&D Tax Incentive

What is the R&D Tax Incentive and what does it do for businesses?

The Research & Development (R&D) Taxation Incentive is designed to increase businesses' investment in innovation and encourage Australian industry to undertake research and development activities. It helps reduce company tax substantially and, in certain circumstances, can provide a sizable tax refund. 

At Brentnalls SA, we consider the R&D Tax Incentive to be a specialised but valuable and generous incentive for our clients to consider. We can help you identify and access the R&D tax incentive (as well as other incentives), provide support and assist with implementation.

How much of a tax reduction is offered?

If your company has incurred R&D expenditure of at least $20,000 in the financial year, you may be eligible.

The R&D tax offset for businesses with an aggregated turnover of less than $20 million is 43.5%.

For companies with turnover of more than $20 million, the tax offset is 38.5% and is non-refundable.

As well as claiming direct expenses incurred in a project, R&D expenditure claims commonly include staff wages and on-costs involved in the R&D Project, and other office expenses.

Consider the Eligibility Criteria

R&D is principally about generating new knowledge through experimentation and using this knowledge to develop new or improved products, systems or processes.

When considering eligibility for R&D the following criteria needs to be considered:

  • Does the project involve developing a new product, an improved product, a new process or improved process?
  • Are your activities generating new knowledge?
  • Do your activities involve testing an idea or theory by carrying out tests or experiments and evaluating the results?

If the answer is yes to these questions it may be worth discussing your eligibility further.

As well as claiming direct expenses incurred in a project, R&D expenditure claims commonly include staff wages and on-costs involved in the R&D project, and other office expenses.

The R&D Tax Incentive is claimed in the Company Income Tax Return, but also requires annual registration with Ausindustry within 10 months of the financial year (i.e. by 30 April for most businesses).

Changes to the R&D Tax Incentive from 1 July 2021

In May 2018, the Government announced they would amend the R&D Tax Incentive provisions, to encourage additional investment in R&D whilst also ensuring the integrity of the system for the Government.

The proposed changes, yet to be legislated, will include:

  • For companies with an aggregated turnover below $20 million, the refundable R&D tax offset:
    • Tie the offset rate to be a premium of 18.5% above the relevant company tax rate.
  • Increase the R&D expenditure threshold from $100 million to $150 million per annum so that large R&D spend companies have an incentive to increase R&D in Australia.

Why Brentnalls SA?

Brentnalls SA provides R&D Tax Incentive services to a range of industry sectors including mining, manufacturing, technology, engineering, consumer products, telecommunications and construction. We are experienced in assessing, compiling and defending R&D claims.  

There are also other Government grants and concessional loan schemes available to innovative businesses and exporters.  

*Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Bill 2020.

If you would like to print this information please click here for PDF format.

The information provided in this information sheet does not constitute advice. The information is of a general nature only and does not take into account your individual situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.

Our Services

Our services go beyond compliance to find out more about your goals, your priorities and establish plans to grow and protect your future wealth. We will take the time to listen, ensuring we meet your goals, as well as guide you so you have a better understanding of the financial decisions being made. 

"The motivation of seeing tangible growth in wealth helped us to realise our financial goals well ahead of time."
Marcus Rolfe | Director, URPS

Our services include:

Accounting & Tax
Business Advisory
Wealth Creation & Preservation
Our Specialisations

So, when people ask, "why are you different from other firms?" We appreciate that to be your trusted advisor; we need to understand the industry you work within. We focus on finding out more about your short- and long-term goals and priorities, so we can proactively provide the value your seeking.

Brentnalls Agribusiness
Brentnalls Construction
Brentnalls Health

You may then ask, "what about industry-related issues?" the answer is we place a great deal of importance in understanding and keeping up-to-date with industry-specific issues. Brentnalls SA's strength is in our firm's collective experience and depth of industry knowledge. We understand your need to feel confident and comfortable; therefore, we have considered all the issues and challenges that you've faced on an ongoing basis.

"Helping you achieve your dreams, is our passion, and our strength is in our dedicated professional team."



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