The R&D Tax Concession is the principal Government initiative to increase the amount of R&D undertaken in Australia. It is broad-based, available to all industry sectors and each company controls the direction of their R&D.  The concession enables Australian companies to deduct up to 125% of eligible expenditure incurred on R&D activities from assessable income when lodging their tax returns. An Incremental Tax Concession (175% Premium) and R&D Tax Offset are also available in certain circumstances.  The Industry Research and Development (I R&D) Board (through AusIndustry) and the Australian Taxation Office (ATO) administer the R&D Tax Concession jointly.

R&D Tax Offset

The R&D Tax Offset is available to small companies doing R&D.  The R&D Tax Offset is of particular benefit to companies in a tax loss situation. The level of tax offset available to eligible companies is 30 per cent of the deductions available to them under the R&D Tax Concession. This refundable amount is then offset against any other tax owing before it is refunded.

Incremental Tax Concession (175% Premium)

The 175% Premium is available for additional investment in R&D, focused on labour related R&D expenditure.