Claiming the R&D Tax Incentive this Tax Time

Consider these key points about the R&D tax incentive before you lodge your company tax return this year.

If you engage in research and development (R&D) activities and are eligible for the R&D tax incentive, you must lodge an R&D tax incentive schedule when you lodge your company tax return.

Before lodging your 2023 company tax return and the R&D schedule, consider these key points:

• review your eligibility
• use the instructions for the 2023 schedule
• you can use the R&D calculator to help calculate your R&D tax incentive claim.
• the offset rates are different depending on your company’s aggregated turnover and R&D intensity
• the R&D expenditure threshold increased to $150 million per year from income years starting on or after 1 July 2021
• R&D activities conducted overseas must be covered by an Overseas Finding
• there are general anti-avoidance rules in Part IVA to cancel the R&D tax offsets obtained in connection with a scheme
• you must register each of your R&D activities with AusIndustry through the R&D Tax Incentive customer portal before you lodge your claim.

The rates that apply for companies that have an aggregated turnover of $20 million or more or, are controlled by income tax exempt entities, is their company tax rate plus:

• 8.5% for R&D expenditure up to 2% R&D intensity
• 16.5% for R&D expenditure above 2% R&D intensity.

If your company has an aggregated turnover below $20 million, the refundable R&D tax offset rate is your company’s tax rate plus 18.5%.

Source: ATO