How Does the R&D Tax Incentive Work for Your Business?
The R&D Tax Incentive is an Australian Government program. It helps businesses cut the cost of new technology projects. First, you spend money on eligible research. Then, you receive a tax offset in return. More than 13,000 businesses use it today. How much can you get back? For most small businesses, the offset equals 18.5% plus the company tax rate. That makes 43.5%. This rate applies when your turnover stays under $20 million. Best of all, the offset can be refundable. So if it is bigger than your tax bill, the ATO pays you the difference in cash. For example, a hardware startup spends $85,000 on eligible R&D and earns no income yet. As a result, it receives a $36,975 refund. Who can claim? You need to meet a few simple rules: Your business generally must be a company. You must spend more than $20,000 on R&D in a financial year. Your R&D must happen for you, not for a client who pays for it and owns the results. Most of your spending must happen in Australia. What co...