The R & D Tax Incentive Offset is designed for companies that are trying to create new knowledge.  For the majority of companies this is experimental development of new or improved products, processes, materials, services and devices.  There have been some recent changes to the tax rates used in calculating the incentive.  

From 1 July 2016, companies that turnover less than $20 million and that are not controlled by an exempt entity / entities may obtain a refundable tax offset that is equal to 43.5% (down from 45%) on the first $100 million of research and development expenditure.  A further refundable tax offset will be available for the expenditure that exceeds $100 million using the company tax rate.

All other entities that don’t adhere to the above may obtain a non-refundable tax offset equal to 38.5% (down from 40%) of their eligible research and development expenditure and a further non refundable tax offset equal to the amount by which their research and development expenditure exceeds $100 million multiplied by the company tax rate.

Division 355 of 355 – 100 of Income Tax Assessment Act 1997 outlines the calculation.

If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com

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