If you’re a small or medium Business Owner looking to save on Research and Development and increase ROI, continue reading to learn about a simple tax incentive that could help support your efforts.
The Australian Government has introduced an opportunity for SME’s to reduce the cost and risk of undertaking Research and Development (R&D) activities, by offering tax refunds up to 45%. If you have an innovative company that aims to create new and improved products, processes or services, this grant could save you thousands of dollars!
An Entity is eligible for the grant if the corporation has been:
- Incorporated under Australian law
- Incorporated under foreign law but are Australian residents for income tax purposes
- Incorporated under foreign law, and are residents of a country with which Australia has a double tax agreement (DTA), including a definition of ‘permanent establishment’ and carry on business in Australia through a permanent establishment as defined in the DTA.
“Okay, I’m eligible. What’s next?”
You must register for the R & D grant before you lodge your company income tax return in order to claim. It is also necessary that you register within 10 months of the end of your company’s income year. Additionally, you must register your Research & Development activities for every income year you want to claim the Incentive.
“What constitutes an action as a Research & Development activity?”
The Australian Government has broken down R & D activity into two categories i.e. Core and Supporting.
Core activities refer to completely innovative, never been done before research that requires experimentation in order to be successful. You must aim to create new knowledge through a guided process with measureable outcomes that can be supported. An example of this activity could be the testing of a new or improved product, device, process or service.
Supporting activities are ones that support the core Research & Development activities. They must have a direct and relatively immediate relationship to the core Research & Development activity.
Now that you have an idea of the requirements, process and benefits of the R&D grant, it’s time to take action! Talk to a trusted Advisor, who can help you get the most out of your Government Grant.
At SBA, our trained professionals are well versed in the nuances of this tax incentive and can help you gain a better understanding of the procedure and all of its benefits. Be smart, be engaged – take a look at all the benefits this Tax Incentive could provide.
Contact SBA today and get the SBA Service Advantage!