2012 Tax Changes – R&D Scheme

Research and development tax scheme

From July 1, businesses will be able to register for and claim the new research and development tax incentive. The incentive has two key components.

Firstly, a 45% refundable tax offset for research and development entities with turnover less than $20 million per year, and secondly, a 40% non-refundable tax offset for any other companies with turnover above that amount. Unused offset amounts may be carried forward in some circumstances.

If a business has a standard income year starting from July 2011, you can start to register and claim the incentive from next month.

But to do so, you need to first establish that you’re an eligible entity, that you meet the requirements of the R&D incentive and that you’ve registered your R&D activities with AusIndustry.

You’ll need to justify your R&D activity under the new incentive, and you’ll need to identify which activities are “core”, or “supporting” activities. You can check out the definition of both of those here, but essentially, core activity is an activity whose outcome cannot be known or determined in advance on the basis of current knowledge.

The business records you keep must be sufficient to verify the amount of money you spend on R&D, and you’ll need to satisfy a few tests as well.

In short, there’s a lot to get in order. To get all the details about how you can access the R&D incentive, you should head over to the AusIndustry site here, which will give you all the details.