Entities engaged in Research & Development activities may be eligible for:
– 45% tax credit; effectively a 150% tax deduction for entities under $20m turnover
– 38.5% non refundable tax offset; effectively a 133% tax deduction
These incentives can greatly reduce your tax payable or lead to a tax refund.
The Government wants to encourage innovation and this often starts with R&D activities, which may not provide the benefits businesses hope for and are therefore reluctant to commit to spend $$ on. The tax incentives make the risk a little more palatable for a business to undertake.
To qualify for the incentives the R&D, activities need to show:
– Technical uncertainty or risk
– Outcome of the activities cannot be determined in advance
– If the knowledge exists and is not accessible to the company then the company may still qualify
The Government has many grants and incentive programs in addition to R&D that may be of assistance to your business and if you would like to know more please contact me.