Supporting research and development

27 Jul 12

Australian businesses now have access to an easy-to-access tax offset program to help them boost productivity and competitiveness through research and development.

The Federal Government’s new R&D Tax Incentive supports firms of all sizes, including in the manufacturing sector, to invest in innovation. This represents the most significant reform to Government support for R&D in a decade. Since 1 July, businesses are able to register to receive the R&D Tax Incentive for eligible activities undertaken in the 2011-12 income year.

The simple and enhanced tax incentive encourages Australian companies to become more innovative, productive and competitive in the global business environment. Australian Bureau of Statistics figures show businesses that innovate are twice as likely to boost their productivity and are two-and-a-half times more likely to increase staff. So investment in productive R&D is clearly good for business success and, consequently, good for the Australian economy. More businesses carrying out R&D will strengthen Australia’s innovation culture and secure our nation’s economy into the future.

The Australian Government has introduced the biggest reform to the way government supports business R&D in more than a decade. The R&D Tax Incentive supports eligible R&D undertaken in all environments – including on the factory floor. This assistance will help innovative businesses undertake more R&D, providing higher base rates of support than the previous R&D Tax Concession.



There is a 45% refundable tax offset to eligible small and medium enterprises (SMEs) with an aggregated turnover of less than $20m per annum. An SME can receive a cash refund if it is in tax loss. And there is a 40% non-refundable tax offset to all other eligible businesses.

Unused tax credits may be carried forward to offset future tax liabilities.

For businesses with a turnover of less than $20m, the new R&D Tax Incentive doubles the rate of support compared to the old R&D Tax Concession. For all other businesses, the R&D Tax Incentive increases the support available by a third.

Importantly, the government is working to encourage companies to make the most of innovation as a key part their business, both through accessing the R&D Tax Incentive and by progressing good-practice knowledge management and R&D governance.

AusIndustry, is providing comprehensive, appropriate, clear and accessible guidance for business. This will assist companies to transition from the old R&D Tax Concession to the new R&D Tax Incentive and ensure program participants have easy access to the tax incentive while meeting compliance obligations under the program.

The registration smart form is available at the AusIndustry website (www.ausindustry.gov.au), together with detailed guidance material. AusIndustry can be contacted for further information on 13 28 46.