About the R&D Tax Incentive
The R&D Tax Incentive (R&DTI) offers a company whose revenue is below $20 million an additional 18.5% benefit on any of its R&D spend. Companies with a turnover of over $20 million also receive a generous benefit, depending on the intensity level of their R&D expenditure.
If the company is operating at a loss, the extra benefit would be recoverable as a cash refund. For example, if a company with a standard base tax rate (25%) incurred $100,000 of R&D expenditure and were in a loss situation, the company would be entitled to a $43,500 cash injection through the R&DTI.
On the other hand, if the company reported a profit, they would be entitled to an additional 18.5 per cent tax benefit on their R&D spend. A critical point to note is that the R&DTI works on a financial year basis, meaning that a company can claim on their R&D expenditure for their past financial year’s operations.
The R&DTI is not only available to technology companies; it is also available to any company engaged in a project where new knowledge is being created and may be eligible.
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