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September 30, 2020

The Australian Government R&D Tax Incentive Program - Is your business eligible?

(Image Credit: The Conversion)

At the end of the financial year, there is always lot going on in the world of business, however, it is also a great time to see if your business qualified for the Australian Government’s R&D Tax Incentive Program. The application process for the R&D tax incentive for the FY2020 tax year opened on the 1st July 2020. We have complied from our expert Registered Tax Agents a step by step process of how to asses you eligibility.

1. Confirm the eligibility of your entity.
It’s important to note that some corporate structures and IP arrangements can actually make you ineligible. Therefore, we always recommend reviewing these before you make a claim each year.

2. What are your eligible R&D activities and do you have any?
It’s always essential that you can identify your R&D activities in order to meet the requirements. You need to be able to show your business activities are creating something new and knowledgeable. Have you followed scientific principles and documented your process?

3. Where were the activities undertaken.
In an increasingly globalized world, you need to make sure that the R&D activities the business undertook were done so in Australia. If they weren't your business can also submit an overseas funding request.

4. Will you own the IP?
Have you met the On Own Behalf rules? These rules relate to control, risk and the ownership of your business IP.

5. Do you have the documentation?
For your application to be successful it is crucial that your business has stayed up to standard in terms of the internal, contemporaneous documentation. Do you have dated records and processes, for quality of the timesheets and activities performed. This is particularly important around the knowledge gap you wish to bridge through your R&D.

6. Have you worked with other entities on the R&D?
Are there any other entities involved in the same R&D project as you? If so, you will need to make sure they are incurred and paid by the claiming entity before the 30th June 2019. Otherwise, you may not be able to claim your expenses.

7. What’s your profit-loss position?
Lastly, it’s important to assess your profit-loss position and aggregated turnover early. This is because these can change for your business every year and can impact the way in which your business receives its benefit.

Now a lot of these checkpoints can be confusing and overwhelming, if you're starting out to assess your business for its R&D tax incentive. Your Registered Tax Agent is a great starting point to discuss your individual business circumstances and, Mark Bouw Group works closely with some of Australia’s leading R&D tax advisors to help your business navigate the pathway.

For more support, contact the Mark Bouw Group for your free 1-hour consultation.

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