The document discusses Australia's R&D Tax Incentive program, which provides refundable tax credits to companies that undertake research and development activities. It outlines the eligibility requirements for companies, such as having an aggregated turnover of less than $20 million per year. It also describes the types of costs that can be claimed, including direct costs like salaries and indirect costs like overheads. Companies are encouraged to register their R&D activities with AusIndustry by April 30th each year to receive the tax incentive.

1. niftygrants.com.au
Government Grants
& Incentives

2. Say hello to the
R&D Tax Incentive
niftygrants.com.au
Conducting innovation
projects or research &
development?

3. What is the R&D Tax Incentive?
Program Details
● Government program (AusIndustry / ATO)
● Businesses creating new things or improving old ones
The program aims:
● Incentivising businesses to undertake innovation and R&D
● Provide economy-wide benefits to Australia
● Increase competitiveness / improve productivity.
niftygrants.com.au

4. ✅ A for profit entity
✅ Is incorporated as an Australian company
✅ Has an aggregated turnover of less than $20,000,000 per annum
✅ Has spent at least $20,000 on eligible R&D activities
Company eligibility to claim the R&D Tax Incentive is assessed on the following:
What companies are eligible for the 43.5% refundable tax
offset ?
niftygrants.com.au

5. ✅ Improve cash flow while pre-revenue
✅ Require less external funding
✅ It’s an entitlement - i.e. not a competitive grant program
Why should eligible companies register?
niftygrants.com.au

6. Is this skateboard
eligible for R&D?
Probably not
Is this motor
eligible for R&D?
Probably not
Is this motorised
skateboard eligible
for R&D?
Probably
Developing
Improving
Testing
Trialling
R&D Process includes
Am I undertaking R&D?
niftygrants.com.au

7. ✅ New knowledge
Am I creating something underpinned by new and unique
technology?
✅ Unknown Outcome
Did I know if it was possible before I started working on it?
✅ Experimentation
Did we need to go through a processing of testing and results to
prove that it was possible?
Three key points of eligibility
niftygrants.com.au

8. ✅ New knowledge
Am I creating something underpinned by new and unique
technology?
✅ Unknown Outcome
Did I know if it was possible before I started working on it?
✅ Experimentation
Did we need to go through a processing of testing and results to
prove that it was possible?
Three key points of eligibility
niftygrants.com.au

9. Companies in any of the following industries are very likely to be undertaking R&D:
Manufacturing Online Services Agriculture Information
Technology Biotechnology Clean Technology Mining Services
Engineering Services Construction Services Telecommunications Logistics
Financial Services Retail Energy Textiles
Technology Automotive Food & Beverage
Which industries are eligible?
niftygrants.com.au

10. R&D example 1
Developing a new Mobile App for delivering insurance
comparisons

11. R&D example 2
Deriving a personal insurance risk assessment from
smart device data.

12. Large companies
(aggregated turnover $20M+)
A 38.5% non-refundable tax credit
● Reduction in tax payable of 8.5c for every dollar
spent on R&D
i.e. $1M R&D project = $85,000 tax saving
or
● Carry forward tax credit if company is not
profitable and paying tax
Startups and SME’s
(aggregated turnover less than $20M)
A 43.5% refundable tax credit
● Reduction in tax payable of 13.5c for every dollar
spent on R&D
or
● Cash refund of 43.5c for every dollar spent on R&D
when accruing tax losses
i.e. $1M R&D project = $435,000 cash refund
What can I get back?
niftygrants.com.au

13. Direct
The majority of costs directly spent on R&D can be claimed. These costs usually include:
● Proportions of salaries of technical staff (e.g. programmers, engineers, etc); including
superannuation fund contributions, payroll taxes and workcover
● Consultants and contractors working on the development
● Travel costs if off-site work is required
Costs of overseas contractors are generally excluded.
What costs can I claim?
niftygrants.com.au

14. What costs can I claim?
Indirect
Indirect costs can also be claimed, these usually include:
● Overheads (e.g. rent, electricity, internet, etc)
● Software licences
● Depreciation (for assets used in R&D activities, unless pooled)
● Salaries of support staff (e.g. project management, admin, finance, etc)
niftygrants.com.au

15. How do I claim?
✅ Identify Projects and activities in line with R&D legislation
✅ Calculate eligible expenditure
✅ Register activities with AusIndustry before April 30
✅ Lodge an R&D Tax Schedule with your company Income Tax Return
✅ Keep records to substantiate your claim if reviewed
niftygrants.com.au

16. ● FY17 expenses
○ Incurred between 1 Jul 2016 - 30 Jun 2017
○ Deadline to claim 30 Apr 2018
● FY18 expenses
○ Incurred between 1 Jul 2017 - 30 Jun 2018
○ Claim period opens 1 Jul 2018 and closes 30 Apr 2019
When do I claim?
niftygrants.com.au

17. Claim online, anytime - NiftyGrants.com.au
Receive
incentive
Sign up
for free
Submit
claim
PwC
specialist
Review
Lodge
● PwC quality
● Not eligible, No fee
● Transparent, fixed pricing based on eligible R&D spend
● Assistance to write the application if required (for an additional fee)

18. Link your Xero account to
pull financial reports directly
into Nifty Grants

19. Take a look at the
Export Market
Development Grant
niftygrants.com.au
Expanding your business
to overseas markets?

20. If you’re investing in marketing and advertising to sell your product into an overseas market, you
may be eligible to have up to 50% of these expenses refunded through AusTrade’s Export Market
Development Grant (EMDG).
The claim period opens on 1 July each year - to learn more at niftygrants.com.com/emdg or speak
to a PwC specialist.
About the Export Market Development Grant
niftygrants.com.au

21. Business eligibility:
✅ Carry out business in Australia
✅ Earned an income of less than $50 million in that financial year
✅ Spent at least $15,000 on eligible export promotional activities
Eligible promotional export activities include the promotion of:
✅ The export of goods
✅ The delivery of services outside of Australia
✅ Services in Australia to non-residents
✅ Inbound tourism
✅ The export of intellectual property outside of Australia
Key points of eligibility
niftygrants.com.au

22. EMDG Categories
✅ Overseas representatives up to $200,000
✅ Marketing consultants up to $50,000
✅ Marketing visits travel costs +
$350 per diem
✅ Free samples up to $15,000
✅ IP registration and related insurance up to $50,000
✅ Trade fairs, seminars, in-store promotions no specified limit
✅ Promotional literature and advertising no specified limit
✅ Overseas buyers up to $45,000
($7,500 per buyer per visit)
Eight Categories of Eligible Spend
niftygrants.com.au

23. Examples of eligible EMDG claimants
✅ An Australian technology startup advertising to customers in US and Europe
✅ An IoT device manufacturer making products in Australia and selling into China
✅ A new skincare product manufacturer targeting customers overseas
✅ A wine producer creating a new market in the UK

24. Claim online - NiftyGrants.com.au
Receive
incentive
Sign up
for free
Submit
claim
PwC
specialist
Review
Lodge
● PwC EMDG specialists available for advice
● Not eligible, No fee
● Transparent, fixed pricing based on EMDG spend

25. Examples of eligible EMDG claimants
✅ An Australian technology startup advertising to customers in US and Europe
✅ An IoT device manufacturer making products in Australia and selling into China
✅ A new skincare product manufacturer targeting customers overseas
✅ A wine producer creating a new market in the UK

26. Get ATO verified
Early Stage Innovation
Company (ESIC)
niftygrants.com.au
Want to make your company
more attractive to investors?

27. What’s an Investor Tax Incentive?
Details
● Government program (ATO)
● Investors may be eligible for tax incentives
● Encourages investment in Early Stage Innovation Companies
(ESIC)
niftygrants.com.au
What’s a ESIC?
Program details
● Early Stage Innovation Company status
● Self assessment - optional ATO private ruling
● Makes company more attractive to investors

28. Qualifying as an Early Stage Innovation Company
niftygrants.com.au
To be considered an ESIC, a company must qualify under a two stage
self-assessment:
● Early stage company test AND
● Innovation test
○ 100 point test, or
○ Principles based test
Risk Alert!
Incorrect self assessment could give rise to potential tax related
issues for both parties.

29. The solution: ATO private rulings
niftygrants.com.au
● Submit ESIC application
● Output: documentation of ATO verification of ESIC status
● A safeguard for the investor and company seeking investment
This is the responsibility of the company, not the investor.

30. How to obtain ESIC ATO private ruling with Nifty
niftygrants.com.au
● Create a free account
● Complete eligibility checklist and ESIC application
● PwC tax specialists will review, finalise and submit application to
ATO
● Receive verification documentation in 2-4 weeks
Help fast track capital raising armed with this documentation

31. Example: ESIC and the Investor Tax Incentive
niftygrants.com.au
The company
● Incorporated 25 June 2016
● Total expenses to date equal $750,000
● Assessable income $180,000 in the previous income year
● $400,000 worth of eligible R&D deductions
● Completed an eligible accelerator program
● Raised capital of $50,000
● Qualifies as an ESIC under the 100 point test, no need to look at innovation test
The investor
● Sophisticated investor invests $1.5m in the company on 8 August 2017
The outcome
● Eligible for an offset of 20% up to $200,000, meaning offset of $200,000 in their
2018 income tax return
● Investor sells shares for $10,000,000 on 2 January 2027
● Capital gain disregarded

32. Apply online, anytime - NiftyGrants.com.au
Receive
status
Sign up
for free
Submit
details
PwC
specialist
Review
Sent to
ATO
• PwC feedback on applications
• Receive verification documentation in 2-4 weeks
• Help fast track capital raising armed with this documentation
• Transparent, flat fee for service

33. Email us:
support@niftygrants.com.au
Leave a message and we’ll call
you back: 1800 778 939
niftygrants.com.au
Questions?

34. The information contained in this publication is for general guidance on matters of interest only. The application and impact of laws can vary
widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, and the inherent hazards of electronic
communication, there may be delays, omissions or inaccuracies in information contained in this publication. Accordingly, the information on this
publication is provided with the understanding that the authors and publishers are not herein engaged in rendering legal, accounting, tax, or
other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or
other competent advisers. Before making any decision or taking any action, you should consult a PricewaterhouseCoopers professional.
While we have made every attempt to ensure that the information contained in this publication has been obtained from reliable sources,
PricewaterhouseCoopers is not responsible for any errors or omissions, or for the results obtained from the use of this information. All
information in this publication is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results obtained from the
use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance,
merchantability and fitness for a particular purpose.
In no event will PricewaterhouseCoopers, its related partnerships or corporations, or the partners, agents or employees thereof be liable to you
or anyone else for any decision made or action taken in reliance on the information in this site or for any consequential, special or similar
damages, even if advised of the possibility of such damages.
Information contained in this document is correct at the time of publishing: 12 February 2018. Contact support@niftygrants.com.au for updates.
© 2018 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal
entity. Please see www.pwc.com/structure for further details. Liability limited by a scheme approved under Professional Standards Legislation.
Nifty Grants is service by PwC Australia.
Disclaimer