What is the R&D Tax Incentive?

There are a few factors to consider:

• Does the R&D entity have > $20M in revenue
  • If Yes then the R&D benefit is not refundable
  • If No, continue reading
• Does the R&D entity have enough losses to drawdown the refundable cash back benefit
  • Yes: your R&D eligible activities would be refundable in cash
  • No: You would be eligible for the tax saving benefit but not the cash back benefit

No, overseas development is not claimable unless an Advance and overseas finding
is obtained from the ATO prior to the completion of the financial year looking to be claimed.

It’s important not to get lost in claiming expenses if they aren't connected to R&D activities. The first step should always be to identify the R&D activity and after that to try and find a methodology to apply value to that activity.

The short answer to the question is, No, marketing expenses are not claimable. If marketing expenses were incurred in order to acquire test users to perform R&D testing then that question needs to be looked at more deeply by an expert.

The question needs to be broken down into the different sections of a patent.

By nature a patent should be done very early on in the R&D process in order to file the patent before the R&D that needs patenting actually occurs.

The new knowledge search of the patent is the section that could be looked at when making a R&D tax incentive claim. By virtue of the patent looking to see if the same thing exists in the world, the new knowledge section of the R&D definition may possibly be utilised.

Each claim needs to be looked at in its own merit when it comes to claiming patent expenses.

Yes, startups are often some of the biggest beneficiaries of the R&D Tax Incentive in Australia. Even if a business is pre-revenue or running at a loss, eligible R&D activities may still generate a refundable benefit under the research and development tax incentive. This is sometimes referred to as the research and development tax offset, which allows early-stage companies to boost cash flow. Claiming the research and development tax offset early helps startups continue to innovate while building long-term success.

Eligible R&D activities are those that generate new knowledge, improve processes, or develop innovative products. Under the research and development tax incentive, qualifying activities must be experimental in nature and follow a systematic process. The R&D meaning excludes routine work such as maintenance or market studies. If the activity meets the requirements of the research and development tax offset, businesses may recover part of their investment. Leveraging the research and development tax offset ensures that innovation is rewarded financially.

Accurate record-keeping is essential for any R&D Tax Incentive claim in Australia. To meet the standards of the research and development tax incentive, businesses must document experiments, methodologies, costs, and results. Good records help show that activities meet the R&D meaning and comply with the program. Without this evidence, the research and development tax offset may be reduced or denied. Properly maintained records also strengthen the reliability of future claims under the research and development tax offset.

Yes, software development can often be included in R&D tax claims when it involves technical uncertainty or new solutions. The research and development tax incentive covers projects such as building new platforms, developing algorithms, or creating innovative systems. Simple coding or bug fixes do not usually qualify under the R&D meaning. However, if your work is eligible, the research and development tax offset allows you to recoup part of your costs. Claiming the research and development tax offset ensures your technology investments deliver both innovation and financial benefit.