Offsets and Rebates for Businesses

Find out about tax offsets (or rebates) available to eligible businesses.

About tax offsets

Tax offsets (also referred to as rebates) directly reduce the amount of tax payable on your taxable income. Offsets can reduce your tax payable to zero but can’t get you a refund unless they are refundable tax offsets.

Small business income tax offset

Small businesses are entitled to the small business income tax offset on their:

• net small business income from sole trader activities
• share of net small business income from a partnership or trust (after deductions to your share have been applied).

Foreign income tax offset

You may be eligible for a foreign income tax offset if you paid tax on income earned in another country.

Research and development tax incentive

The research and development (R&D) tax incentive provides a tax offset for eligible R&D activities. It has two core components:

• a refundable tax offset for certain eligible entities whose aggregated turnover is less than $20 million
• a non-refundable tax offset for all other eligible entities.

Loss carry back tax offset

Loss carry back is a refundable tax offset that eligible corporate entities can claim in the 2020–21, 2021–22 and 2022–23 income years. The tax offset may be available to entities that have made tax losses in the 2019–20, 2020–21, 2021–22 or 2022–23 income years.

Digital games tax offset

The digital games tax offset (DGTO) is a refundable tax offset which allows eligible companies that develop digital games in Australia to claim 30% of their total qualifying Australian development expenditure.

Source: ATO