The R&D Tax Incentive is a program jointly administered by AusIndustry and the ATO. The objective of the program is to foster Australian innovation by providing a tax incentive to firms that undertake eligible R&D activities.
The R&D Tax Incentive consists of a tax offset for eligible R&D expenditure. The tax offset rate is:
45% for companies with annual turnover of less than $20M.
40% for companies with annual turnover of $20M or more.
With the 2 May due date for lodging 2014/2015 registration applications now less than 10 days away, companies seeking to claim the R&D Tax Incentive in their 2015 tax returns need to give priority to the completion of their application.
Keep in mind that 2 May is a strict deadline. If applications are not lodged on time, the company will simply miss out on it's opportunity to claim the R&D Tax Incentive.
If you believe that your company can claim the R&D Tax Incentive, but have not yet looked at applying, it is not too late. However, there is no time to waste and you should talk to your tax adviser asap.
For those companies that have already lodged their applications, we recommend that they start preparations for their 2016 application now. Eligible R&D activities should be identified and appropriate documentation and record keeping should be put in place. The company will then be well placed to submit the 2016 application promptly after end of financial year.
For further information on the R&D Tax Incentive, please check our our blog from January this year.