Money
Issue No. 10 - April/May 2003
R&D Tax Concessions
From the beginning of this financial year, business has been entitled to claim research and development expenses under two new elements of the Commonwealth's R&D Tax Concession-the 175% premium rate for additional R&D which builds on the 125% base rate, and the R&D Tax Offset (Rebate) which allows small companies, particularly those in tax loss, to obtain a rebate equivalent to their entitlements under the R&D Tax Concession.
Also, new measures under the Tax Offset (Rebate) mean that, for the first time, small businesses may be able to claim a cash rebate for R&D.
To qualify for these benefits taxpayers need to have an R&D plan that complies with the guidelines.
The R&D Tax Concession is the Commonwealth Government's principal initiative to build up R&D in Australia. It is broad-based, available to all industry sectors, and each company controls the direction and thrust of their R&D.
The Concession lets Australian companies deduct up to 125% of eligible R&D spending from assessable income when lodging their tax returns. For income years commencing from 1 July 2001, a 175% Premium (Incremental) Tax Concession and R&D Tax Offset (Rebate) are also available.
The Concession is administered jointly by the Industry Research and Development (IR&D) Board, through the Commonwealth Government's business assistance agency, AusIndustry, and the ATO.
Taxpayers claiming the R&D Tax Offset (Rebate) must register with the IR&D Board before lodging company tax returns. Applications for registration must be lodged within 10 months of the end of the income year. The ATO data matches claimants and registrants after this 10 month period.
Registration
Registration is available to any eligible company incorporated in Australia (Australian incorporated companies cannot claim the R&D Tax Concession in the capacity of a trustee or nominee other than of a public trading trust).
R&D activities must be systematic, investigative a...
