Information about eligibility and who can claim the Research and development tax incentive schedule.
Eligibility for R&D tax incentive
You may be eligible to claim the R&D tax incentive in your Company tax return 2023 if you are an R&D entity that has registered its R&D activities with AusIndustry for 2022–23.
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 body corporate 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
- you are a resident of a country with which Australia has a comprehensive double tax agreement which includes a definition of 'permanent establishment'
- you carry 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).
Generally, neither trusts nor body corporates acting in the capacity as a trustee of a trust are eligible R&D entities. The exception is a body corporate in the capacity of trustee for a public trading trust.
You must register before claiming
It is a condition that you register your activities with AusIndustry to be entitled to the R&D tax incentive. You must lodge your application for registration of the activities within 10 months of the end of your income year. For example, if your income year ends on 30 June, then you must register with AusIndustry by 30 April of the following year.
You must register with AusIndustry before you make a claim for the R&D tax incentive on the company's tax return.
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).
The R&D tax incentive is jointly administered by AusIndustry 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.auExternal Link
- phone AusIndustry on 13 28 46.
For information about what amounts are eligible for the R&D tax incentive and how to claim:
Continue to: Completing the Research and development tax incentive schedule