These instructions will help you complete the Research and development tax incentive schedule 2014. 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 2014 (NAT 0656).
If you fill in the Research and development tax incentive schedule 2014 on your computer, the form will complete some calculations and fields for you.
An online calculator is also available to help you complete the Research and development tax incentive schedule 2014. 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?
At the time of publication, proposed changes to deny access to the R&D tax incentive for companies with aggregated assessable income of $20 billion or more for an income year are before parliament but have not become law. For further information, go to Research & development tax incentiveExternal Link on the Department of Industry, Innovation and Science website.
Who must complete a Research and development tax incentive schedule?
You must complete and lodge a Research and development incentive schedule 2014 if you make a claim at item 21 on your Company tax return 2014 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 2014. 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 2014. 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 2014 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 2013–14.
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 any of the following:
- incorporated under an Australian law
- incorporated under foreign law but an Australian resident for income tax purposes
- incorporated under foreign law, and both of the following apply
- the corporation is a resident of a country with which Australia has a comprehensive double tax agreement which includes a definition of 'permanent establishment'
- the corporation carries on business in Australia through a permanent establishment as defined in the double tax agreement. It is then eligible to the extent that it carries on business through that permanent establishment.
You are not eligible for the R&D tax incentive if you are:
- 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.
See also
You must register before claiming
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.
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).
See also
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/assistance/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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