R&D Tax Incentive Seminar

By Ben Youn
Copyright 2015 Quantum Business House
WELCOME to QUANTUM BUSINESS HOUSE

 3 hours session
 10 minutes tea time
 Bathroom & Kitchen
 Today’s Speaker
 Please network each other
 Future Plan
- Business Forum
- Networking Events
- Business Mentoring

 Originally from R&D Tax Concession (change
made on July 01, 2011)
 45% refundable tax offset for businesses less
than $20 million turnover
 40% non-refundable tax offset for all other
eligible entities.
 Administered by AusIndustry (activity part)
and the ATO (tax administration)

 Legal authorities:
- Division 355 of Income Tax Assessment Act
1997
- Part III of the Industry Research &
Development Act 1986
- The Tax Laws Amendment (Research and
Development) Bill 2010 Explanatory
Memorandum

 Entities require to register eligible R&D
activities with AusIndustry within 10 months
after the end date of the financial year. (e.g.
April 30 is the due for June 30 entities)
 Once approved by the AusIndustry, a
registration number will be given to the entity
to claim the incentive for the R&D
expenditure through tax return.

 Must meet the definition of Core R&D
activities
 Supporting R&D activities
 Self-Assessment and Record Keeping
Requirements
 Compliance review by AusIndustry
- Request of further evidences
- Monitoring visits

 Core R&D Activities are experimental activities:
1. Whose outcome cannot be known or
determined in advance on the basis of current
knowledge, information or experience, but can
only be determined by applying a systematic
progression of work that:
a. is based on principles of established science;
and
b. Proceeds from hypothesis to experiment,
observation and evaluation, and leads to logical
conclusions; and

2. that are conducted for the purpose of
generating new knowledge that include new
or improved materials, products, devices,
processes and services.

1. Market research, market testing or market
development, or sales promotion
2. Prospecting, exploring or drilling for
minerals or petroleum
3. Management studies or efficiency surveys
4. Research in social sciences, arts or
humanities
5. Commercial, legal and administrative
aspects of patenting, licensing or other
activities

6. Activities associated with complying with
statutory requirements or standards.
7. Any activity related to the reproduction of a
commercial product or process.
8. Developing, modifying or customising
computer software for the dominant purpose
of use by entities for their internal
administration.

 Activities directly related to core R&D
activities:
a. is an activity referred to in the core R&D
activities exclusion list; or
b. produces goods or services; or
c. is directly related to producing goods or
services;
the activity is a supporting R&D activity only if
it is undertaken for the dominant purpose
of supporting core R&D activities.

 The prevailing or most influence purpose for
conducting an activity
a. the extent to which the activities also
achieve commercial or production outcomes
in addition to assisting the conduct of the
core R&D activities; and
b. The importance of those non-R&D
outcomes.

1. Is the activity a routine activity that is
normally undertaken for non R&D purpose?
2. Would the activity have occurred in the
absence of the core R&D activities?
3. To what extent are normal production
practices disrupted for the core R&D
activity?
4. How great is the risk that production
outcomes will be significantly compromised
as a result of the core R&D activity?

5. Was there a purpose, other than supporting
core R&D activities, for infrastructure
developed in the activity?
6. Will the activity facilitate future that are not
core R&D activities.

 Application is required for overseas R&D
finding beforehand R&D activity application
 Four conditions must be met:
a. The overseas activity must be covered by an
advance finding that the activity in question
is an eligible R&D activity
b. The overseas activity must have a significant
scientific link to one or more core R&D
activities conducted in Australia

c. The overseas activity cannot be conducted solely
in Australia because:
- Conducting it requires access to a facility,
expertise or equipment not available in Australia
- Conducting it in Australia would contravene a law
relating to quarantine
- Conducting it requires access to a population not
available in Australia; or
- Conducting it requires access to a geographical
or geological feature not available in Australia

d. The total amount to be spent in all income
years by the company and any other entities
on:
- The overseas activities that meet the four
conditions; and
- Each other activity conducted wholly or partly
outside Australia that has a significant
scientific link to Australian core activities.
is less than the total amount to be spent in all
income year on:

- The Australian core activities; and
- The activities conducted within Australia that
are supporting R&D activities in relation to
the Australian core activities.

1. Background of the project
2. Preliminary Works
3. Technical Objectives & Risks
4. Commercialisation and Implementation
5. Scope and timeframe
6. Resource allocation

1. Medical Equipments Manufacturer
2. Software Development Company

Any Questions?

 Ben Youn: Business Grant Consultant
 Address: Level 8, 280 Pitt Street SYDNEY NSW
2000
 Phone: (02) 8268 0388
 Fax: (02) 8268 0378
 www.quantumhouse.com.au
 www.australiantaxexperts.com.au

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