Does Rimon offer grants for start ups or non-for-profit companies?
Is there a deadline to apply?
The deadline for the R&D tax incentive is 10 months after the company’s year end.
The deadline for the EMDG is either 30 Nov after the business’ year end (if submitting on one’s own) or the extended deadline is 28 February after the business’ year end if submitting via a qualified consultant.
R&D Tax Incentive FAQs
What is the R&D Tax Incentive grant?
The R&D Tax Incentive is a federal incentive aimed at assisting and growing innovation in Australia. The government funds north of $2 Billion per annum towards innovation via this incentive.
The benefit of the R&D tax incentive ranges between 43.5% and 38.5%. The benefit can be actualised either via a cash back benefit or a tax saving benefit - dependant on the profit or loss situation of the company claiming.
If the business claiming has sufficient losses then the benefit is a cash back benefit of 43.5%. If the business claiming is in a profit then the benefit is a tax saving benefit of 43.5%
Should the claiming business have more than $20 Million in aggregate turnover then the benefit is a 38.5% benefit and can only be a tax saving benefit (i.e. the a company with > $20M in aggregate turnover is exempt from the refundable benefit)
How does the R&D grant work?
Essentially the R&D tax incentive is a tax offset in a company’s tax return. Should the company have the requisite losses then the offset is utilised as a refundable offset.
In other words a company is dipping into their losses in their current day rather than waiting for their future to match their losses to their profits in order to save tax. The tax rate on the incentive (43.5%) is also higher than a company’s tax rate yielding a higher benefit than the company simply offsetting prior year losses against current year profits.
Should a company be in profit then the incentive is used as an offset in the more traditional sense and the claiming company will have a lower tax expense
How do I find out if my business is eligible?
There are many avenues to investigate if your company is eligible for the incentive.
A plethora of information can be found on the ATO website and the Department of Industry, Science, Energy and Resource for someone wanting to do their own research.
The law governing the incentive is very complicated. Advice can be sought to understand one’s eligibility As a starting point have a look at Rimon’s eligibility assessment by clicking here. Feel free to reach out to Rimon and we will do a free assessment for you.
How much can I claim with the R&D Tax Incentive grant?
A company can claim all eligible R&D activities and expenditure in the financial year being claimed.
A claim can be done for any financial year that R&D occurred provided that the R&D activities were submitted by the required deadline. Limits on the incentive only really come into play when a company has either of these points:
- $100,000,000 in R&D expenditure
- $20,000,000 in aggregate turnover
How do I apply for the R&D Tax Incentive?
There are 2 main processes in submitting the incentive:
- Submitting the AusIndustry smart form identifying and expounding on a company’s R&D technical activities
- The deadline on the smart form is 10 months after a company’s financial year end
- The smart form can be downloaded here
- Submission of an R&D tax incentive schedule
- This is done via a company’s tax return
- This part of the submission governs the actual monetary value of the R&D activities being claimed
- A R&D tax incentive schedule is submitted alongside the tax return and the figures contained in the R&D tax incentive schedule also need to be included in the tax return
- Information on the R&D tax incentive schedule can be found here