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R&D Tax Incentive

Our national team helps innovative companies access the R&D Tax Incentive.

The R&D Tax Incentive is a business assistance program administered by the Australian Government to encourage and support businesses to undertake R&D activities that they may not otherwise be willing to attempt.

For income years commencing on or after 1 July 2021, the R&D Tax Incentive provides the following tax offset:

  • R&D entities with aggregated turnover of less than $20 million are entitled to a refundable tax offset that is fixed at 18.5 percentage points above the company’s tax rate. If the tax offset exceeds the entity’s tax liability, the balance is paid to the entity in cash.
  • For R&D entities with aggregated turnover of at least $20 million, the non-refundable tax offset will be set at the company’s tax rate plus 8.5 percentage points for R&D expenditure between 0 and 2% R&D intensity, and 16.5 percentage points for the portion of R&D expenditure above 2% R&D intensity. R&D intensity is the portion of the company’s total expenditure that is identified as being R&D expenditure.

The benefit is accompanied by a rigorous regulatory regime, characterised in recent years by heightened review activity by the ATO and AusIndustry. Claimants need to focus on thorough eligibility assessment and substantiation of claims - PwC’s C.A.S.E. methodology was specifically created for this purpose.

We advise clients from iconic multi-nationals through to nimble start-ups, and everything in between. In addition to supporting our clients with claim compliance and preparation, from start to finish, we assist with reviews and audits associated with R&D Tax Incentive claims.

Agriculture

Agriculture

Have you thought about how the following affects your R&D claim:

  • How do you separate costs incurred on R&D activities from ordinary farming activities?

  • Application of a feedstock adjustment to inputs used in undertaking R&D activities.

  • Is your R&D directly or indirectly related to producing goods or services? Do you know how this may impact on R&D eligibility in terms of the “dominant purpose” test?

Do you have contemporaneous records to substantiate your R&D activities and expenditure?

Talk with us to better understand your claim.

 

Biotechnology

Biotechnology, Medtech and Pharmaceutical

Have you thought about how the following affects your R&D claim:

  • Where are clinical trials undertaken? 

    • Is your research “foreign-owned” - do you meet all the eligibility criteria? 

    • Do you need an Advance/Overseas Finding - do you meet all the eligibility criteria?

  • Who conducts your clinical trials and other research activities?

    • Are all activities conducted “for” the correct entity?

  • Did you receive any government grants? Do you know how this may impact on your R&D claim?

Do you have contemporaneous records to substantiate your R&D activities and expenditure?

Talk with us to better understand your claim.

 

Engineering

Engineering and Manufacturing

Have you thought about how the following affects your claim:

  • How do you distinguish between core R&D activities and routine engineering?

  • How do you identify when R&D stops during a production trial?

  • Did you produce prototypes during your research activities and have you considered how feedstock adjustments may impact your claim?

  • Is your R&D directly or indirectly related to producing goods or services? Do you know how this may impact on R&D eligibility in terms of the “dominant purpose” test?

Do you have contemporaneous records to substantiate your R&D activities and expenditure?

Talk with us to better understand your claim.

 

IT and Software development

IT and Software Development

Have you thought about how the following affects your R&D claim:

  • How do you distinguish between routine software development activities and core R&D activities?

  • The types of business documentation available to evidence that software development activities in the R&D claim meet all the eligibility criteria.

  • Software development conducted for internal business administration.

  • Is your R&D directly or indirectly related to producing goods or services? Do you know how this may impact on R&D eligibility in terms of the “dominant purpose” test?

Do you have contemporaneous records to substantiate your R&D activities and expenditure?

Talk with us to better understand your claim.

 

Mining

Mining

Have you thought about how the following affects your R&D claim:

  • At what point can the application or adaptation of existing technology be considered a core R&D activity?

  • When do R&D activities actually commence and finish within the overall project?

  • Do you know how the feedstock rules apply to your R&D claim?

Do you have contemporaneous records to substantiate your R&D activities and expenditure?

Talk with us to better understand your claim.

 

Start-ups

Start-ups

Have you thought about how the following affects your claim:

  • The impact of capital raising on your aggregated turnover.

  • Do you know how your business structure can affect whether you can claim R&D?

  • Have you considered an Early Stage Innovation Company (ESIC) application?

  • Do you understand the impact of payments to associates and how this affects your R&D claim?

  • Are you planning to expand overseas? Do you know how this can impact your R&D claim? 

  • Is your R&D aligned with your business strategy?

  • Do you have a vision for your Start-up to Scale Up? Talk to us about our PwC Align program to capitalise on PwC’s infrastructure and networking.

Do you have contemporaneous records to substantiate your R&D claim and expenditure?

Talk with us to better understand your claim.

 

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Contact us

Sophia Varelas

Partner, National Leader, PwC Australia

Tel: +61 417 208 230

Richard Gregg

Partner, PwC Australia

Tel: +61 0418 752 624

Amanda Gell

Partner, PwC Australia

Tel: +61 8 9238 3515

Marcus Tierney

Partner, PwC Australia

Tel: +61 3 8603 4358

Imelda Alexopoulos

Partner, PwC Australia

Tel: +61 8 8218 7083

Daniel Knox

Partner, PwC Australia

Tel: +61 0438 335 794

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