Startup Law

Is your business eligible for the R&D Tax Incentive?

To be eligible for the Research and Development tax incentive a business must be a company incorporated under Australian law, or incorporated overseas but an Australian resident for tax purposes, according to the LawAdvisor Legal Research Team.

There is also many other criteria which relates to the activities a business undertakes and  the types of expenditure against which it intends to claim against the tax offset.

PricewaterhouseCoopers (PwC) Brendan White says the incentive is not just for tech startups, as long as a business is going through a process of testing and it didn’t know the solution to begin with, it should be looking into making a claim.

PwC has a great online tool aimed at small businesses and startups, that can help get your claim lodged in under 20 minutes. 

“Individuals, corporate limited partnerships and ‘exempt entities’ (i.e a business whose entire income is exempt from income tax) are not eligible to apply for the R&D Tax Incentive,” the Legal Research Team says.

“Trusts are also not generally eligible R&D entities.”

The R&D Tax Incentive offsets some of the costs for companies doing eligible R&D activities. It’s one of the most generous grants Australian startups have access to, yet according to PwC, many businesses do not even apply.

The program’s goal is to reduce the cost and risk of undertaking research and development activities for Australian businesses. The incentive gives startups up to 45c back for every dollar they spend on R&D as long as they earn under $20 million in a year.

For more information, or to apply, click here