Research and Development Tax Offsets

BSI Innovation is Australia’s leading independent specialist advisory firm for companies wishing to access the 125% R&D Tax Concession and related programs available from the Federal Government.

Our consultants can assist you to:

• Rapidly identify eligible R&D projects;
• Compile the necessary technical information;
• Prepare detailed R&D expenditure information;
• Calculate your entitlement to additional tax deductions; and
• Complete and lodge your application.

Innovation Australia Technical Audits

BSI Innovation provides comprehensive support to companies whose R&D projects have been selected by Innovation Australia to be the subject of a technical audit. We are able to help your company assemble the relevant documentation and guide you through the audit process.

Many BSI Innovation clients have found that our assistance and representations on their behalf during an audit have greatly simplified and accelerated the audit process. Our success rate in this area over some 20 years in practice is unsurpassed.

R&D Premium (subset of R&D Tax Concession)

For companies with continuous history of claiming the R&D Tax Concession, there may be the opportunity to access the 175% Incremental R&D Tax Concession which provides even greater benefits to applicant companies where the level of R&D expenditure exceeds the average of the previous 3 years claims.

BSI Innovation consultants can review your claim history and company structures to ensure you can access the maximum available benefit, providing certainty in the additional benefit delivered. (Note: the 175% Incremental Tax Concession will be discontinued once the Bill introducing a new R&D Tax Credit is passed by the Senate (see below)).

R&D Refundable Tax Offset

Where a company is in a tax loss position, and therefore obtains limited benefits from additional deductions available under the R&D Tax Concession, an election may be made to receive a refundable R&D Tax Offset instead of a tax deduction.  Where the company has sufficient current or prior year tax losses to fully claim the Offset, this election will result in a cash payment of up to 37.5% of the eligible R&D expenditure incurred by the company.

There are three important guidelines which limit who is eligible for the R&D Tax Offset. If you can answer, “Yes” to each of these three questions, and are conducting experimental R&D activities, you may be eligible to elect the Offset:

• Is your company's total group turnover less than $5 million in the financial year?
• Have you have spent less than $2 million on research and development in the 2009/10 financial year?
• Will you be in a tax loss situation for the 2009/10financial year prior to claiming R&D benefits?

R & D Tax Credits

In the 2009 Budget, the Federal Government announced plans to replace the existing R&D Tax Concession and refundable R&D Tax Offset with a new, R&D Tax Credit from 1 July 2010.  For companies with an annual turnover of less than A$20 million, a 45% refundable tax credit will apply.  Companies with turnover exceeding this will be entitled to a 40% non-refundable tax credit for their eligible R&D expenditure.

As part of the move to a new R&D tax incentive, the Federal Government is also making significant changes to the existing tax concession program which could substantially limit the value of the program to Australian companies, and the scope of the R&D activities that it will support.  

Click here for more details and the text of the Taxation Laws Amendment (Research and Development) Bill 2010 which outlines the new program, or speak to a BSI Innovation consultant today about the current status of the Bill and how these new laws may impact your company’s future R&D tax claims.