These instructions will help you complete the Research and development tax incentive schedule 2013. This in turn will help you complete the items for the research and development (R&D) tax offset at item 21 of the Company tax return 2013 (NAT 0656). For more information about the R&D tax incentive, you can go to ato.gov.au/randdtaxincentive
An online calculator is also available to help you complete the Research and development tax incentive schedule 2013. You can print a copy of the schedule when you have finished using the calculator. This schedule will be accepted for lodgment with an original tax return or an amendment request.
What's new?
An additional label has been added to Part D of the Research and development tax incentive schedule 2013 to record R&D expenditure incurred to associates in the previous income year that has not yet been paid or claimed. These instructions have been updated to reflect the change.
The item for the Research and development tax incentive in the Company tax return 2013 has changed to item 21 (formerly item 22). In addition, two new labels have been included at this item:
- B Non-refundable R&D tax offset carried forward from a previous year
- W Feedstock adjustment - additional assessable income.
For more information about these new labels, see the Company tax return instructions 2013 (NAT 0669).
Who must complete a Research and development tax incentive schedule?
You must complete and lodge a Research and development incentive schedule 2013 if you make a claim at item 21 on your Company tax return 2013 for an R&D tax offset under the R&D tax incentive, that is, Division 355 of the Income Tax Assessment Act 1997 (ITAA 1997).
If you have a feedstock adjustment (additional assessable income) but are not claiming an R&D tax offset in this year of income, you do not need to complete the Research and development tax incentive schedule 2013. You will still need to work out your feedstock adjustment and include it at W item 21 and B item 7 on the Company tax return 2013. See Part B of these instructions for information about how you work out your feedstock adjustment.
Who can claim the R&D tax incentive?
You may be entitled to claim the R&D tax incentive in your Company tax return 2013 if you are an R&D entity that has registered its R&D activities with Innovation Australia through the Department of Industry, Innovation and Science for 2012–13.
Only R&D entities can register R&D activities and claim the R&D tax offset. You are an eligible R&D entity if you are a corporation that is:
- incorporated under an Australian law, or
- incorporated under foreign law but an Australian resident for income tax purposes, or
- incorporated under foreign law, and
- a resident of a country with which Australia has a comprehensive double tax agreement which includes a definition of 'permanent establishment', and
- which carries on business in Australia through a permanent establishment as defined in the double tax agreement
- to the extent that you carry on business through that permanent establishment.
You are not eligible for the R&D tax incentive if you are either:
- an individual
- a corporate limited partnership
- an exempt entity (because your entire income is exempt from income tax).
Trusts are not generally eligible R&D entities. The exception is a body corporate in the capacity of trustee for a public trading trust.
You must register before you make a claim for the R&D tax incentive on the company's tax return. You must lodge an application for registration of the activities with Innovation Australia within 10 months of the end of your income year. For example, if your income year ends on the 30 June, then you must register with Innovation Australia by 30 April of the following year.
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Who are the R&D activities conducted for?
Generally, an R&D entity is only entitled to a tax offset if the R&D activities were conducted for one of the entities below:
- the R&D entity itself
- a foreign corporation that is
- connected with, or an affiliate of, the R&D entity (or the R&D entity is an affiliate of the foreign resident)
- a resident of a country with which Australia has a comprehensive double tax agreement.
R&D activities that are conducted for a foreign corporation must be conducted under a written agreement meeting certain conditions between the R&D entity and the foreign corporation.
Additionally, if the R&D entity is a foreign corporation carrying on business through a permanent establishment in Australia, it may be entitled to an R&D tax offset if the R&D activities are conducted for the foreign corporation (and not for the permanent establishment in Australia).
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Who administers the R&D tax incentive?
The R&D tax incentive is jointly administered by the Department of Industry, Innovation and Science and the Australian Taxation Office (ATO).
For information about how to register for the R&D tax incentive and about what R&D activities qualify for the incentive:
- go to business.gov.au/grants-and-programs/research-and-development-tax-incentiveExternal Link
- phone the Department of Industry, Innovation and Science on 13 28 46.
For information about what amounts are eligible for the R&D tax incentive and how to claim:
- go to ato.gov.au/randdtaxincentive
- phone us on 13 28 66.
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