The R&D tax incentive provides a targeted tax offset to encourage certain companies (R&D entities) to conduct R&D activities that benefit Australia and has the following two core components:
- a 45% refundable tax offset for eligible entities with an aggregated turnover of less than $20 million, unless they are controlled by one or more tax exempt entities
- a 40% non-refundable tax offset for all other eligible entities.
Part E of these instructions will assist you in working out which offset you are entitled to and the amount of R&D tax offset you will be able to claim at item 21 of the Company tax return 2013.
See also:
- R&D refundable and non-refundable tax offsets
- Grouping for aggregated turnover purposes
- Claiming the tax offset
Item 1 Exempt entity ownership
Regardless of a company's aggregated turnover, if one or more exempt entities have direct control or indirect control of the company (with a relevant control threshold of 50%), then the company is eligible for the 40% non-refundable tax offset only.
If your company is controlled by one or more income tax–exempt entities, print X in the box at the right of Yes and go to Part E item 5 Non-refundable tax offset. You do not need to complete items 2, 3 and 4.
If your company is not controlled by one or more income tax exempt entities, print X in the box at the right of No and go to item 2.
Item 2 Aggregated turnover
If a company's aggregated turnover is $20 million or greater, the company is eligible for the 40% non-refundable tax offset.
If your company has an aggregated turnover of $20 million or greater, print X in the box at the right of Yes and go to Part E item 5 Non-refundable tax offset. You do not need to complete items 3 and 4.
If your company has an aggregated turnover of less than $20 million, print X in the box at the right of No. You must complete items 3 and 4 of Part E. You do not need to complete item 5.
Item 3 Aggregated turnover less than $20 million
At Part E item 2, if you have printed X in the box at the right of No, you must complete item 3 and show details for your company and all entities connected with your company, or that are affiliates of yours, during 2012–13.
Write your company name and tax file number (at a item 3), and (if any) the names and tax file numbers of all entities that are connected with, or are affiliates of, your company at any time during the year in Part E item 3.
Attach an additional table if you are connected or affiliated with more than three other entities.
In the column Annual turnover, write the amount of each entity's annual turnover, as defined in section 328-120 of the ITAA 1997.
If you have used an additional table, add up the annual turnovers for each of the entities listed on the additional table and include the sum of these amounts at row e.
To correctly calculate aggregated turnover, you will need to make an adjustment if any amounts shown in the Annual turnover column relate to:
- ordinary income amounts derived from dealings between yourself and any entities you have listed in item 3
- ordinary income amounts derived from dealings between two or more other entities you have listed in item 3
- ordinary income amounts derived by entities you have listed in item 3 while they were not connected with you and were not your affiliates.
At row f, show the total amount included in the Annual turnover column which requires an adjustment due to the points described above.
At AT Aggregated turnover write the amount calculated in the following worksheet:
Row |
Calculation element |
Amount |
|---|---|---|
a |
Your company turnover |
$ |
b |
Connected/affiliated entity turnover |
$ |
c |
Connected/affiliated entity turnover |
$ |
d |
Connected/affiliated entity turnover |
$ |
e |
Connected/affiliated entity turnover total from additional table |
$ |
f |
Adjustments required as a result of exclusions from aggregated turnover |
$ |
AT |
Aggregated turnover |
$ |
Item 4 Refundable tax offset
If you answered 'No' to items 1 and 2 of Part E, you can claim the refundable tax offset.
Write at Z1 Total notional R&D deductions the amount shown at Z of Part A, item 11.
Write at U Refundable R&D tax offset the amount calculated by multiplying the amount you have shown at Z1 Total notional R&D deductions by 45%.
Transfer the amount at U to the Company tax return 2013, item 21 label U Refundable R&D tax offset.
You do not need to complete item 5.
Item 5 Non-refundable tax offset
If you answered 'Yes' to item 1 or item 2 of Part E, you can claim the non-refundable tax offset.
Write at Z2 Total notional R&D deductions the amount shown at Z of Part A, item 11.
Write at A Non-refundable R&D tax offset the amount calculated by multiplying the amount you have shown at Z2 Total notional R&D deductions by 40%.
Transfer the amount at A to the Company tax return 2013, item 21 label A Non-refundable R&D tax offset.
Taxpayer's declaration
If you do not lodge the schedule with your tax return, you must sign and date page 4 of the schedule.
Next step: