Over 90% of the Australian economy is led by small to medium enterprises – which opened the way for the government to implement financial programs to support them. 

Knowing the best grants available in Australia helps you understand how you can start and maintain a business with fewer financial problems. And one of the top grants supporting small businesses, which you can opt for, is the Research and Development Tax Incentive (R&DTI). 

What is the Research and Development Tax Incentive (R&DTI) in Australia? 

To help Australian small businesses like yours grow and innovate, R&DTI grants a tax offset to those involved in eligible R&D activities. It also lets you work with registered Research Service Providers (RSPs). 

The tax offset benefits apply depending on when you have conducted your R&D activities. If they’re eligible up to 30 June 2021, you can get a tax offset refund of 43.5% if you have less than $20 million annual turnover and 38.5% with an annual turnover higher than $20 million. 

While R&D activities started on 1 July 2021 are now based on premium rates in addition to your corporate tax rate. 

The refundable tax offset for R&D entities – with a total turnover of less than $20 million – is your corporate tax rate plus an 18.5% premium rate. For entities with a collected turnover of more than $20 million, the refundable tax offset is your corporate tax rate plus an incremental premium depending on your R&D expenditures. 

Visit the official page for R&D tax incentive to learn more.

The R&DTI is an annual application process that helps you ensure you’re eligible for the program. Follow these important steps when applying for the R&D Tax Incentive Grant.

5 Key Steps in Applying for Australia’s Research and Development (R&D) Grant 

Step 1: Self-assess your eligibility 

Review and evaluate your planned R&D activities to know if you’re an eligible entity for the program. You can collaborate with registered RSPs available to give you more expert assistance. Don’t forget to record your self-assessments. 

Step 2: Apply for Advance Overseas Finding

This step only applies if you’re planning to conduct R&D activities overseas. You should start by receiving the mandatory Advanced Overseas Finding to be eligible. 

Step 3: Conduct R&D activities 

As you perform your R&D activities, you should continue your self-assessment before registering. Remember to keep records before, during, and after conducting each activity. 

Step 4: Register for the grant 

Once you’ve assessed that you’re eligible for the incentive, you’re good to go. You can now apply for the program within ten months of the year-end income as you have completed conducting your R&D activities. AusIndustry – a government agency dedicated to helping businesses grow and innovate — will review your application and R&D activities. Once approved, they will then issue your company and R&DTI registration number. 

Step 5: Claim your tax offset

Enter your registration number onto the portal to know the R&D schedule of your company’s annual income tax return. Calculate your collected turnover and tax offset, then lodge your claim. 

Maximise Tax Claims by Investing Digitally 

While applying for the R&D grant can be critical and time-consuming, it’ll help you build a credible and innovative business. One way to propel your biz is by getting it online powered by a reliable domain and web hosting provider. Experience the business growth that you deserve.

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