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The offset in numbers
| Company | Rate | $200,000 of eligible R&D spend |
|---|---|---|
| Under $20 million turnover, in tax loss | 43.5% refundable | $87,000 cash refund, the startup lifeline |
| Under $20 million turnover, profitable | 43.5% offset | $87,000 off the tax bill. The net benefit over the ordinary deduction is the 18.5% premium, or $37,000 |
| $20 million turnover or more | Non-refundable, intensity-tiered premium | Offsets tax only, with excess carried forward |
Two framing corrections the pitch decks skip. For a profitable company, the incremental value over simply deducting the spend is the premium, not the headline rate. And in loss years, refunded amounts reduce carried-forward losses: cash now, smaller shelter later. Both are still excellent. They are just not free money at 43.5%.
What qualifies: the experiment test
What that excludes by design: market research, routine testing and bug fixing, cosmetic changes, using existing technology in standard ways, and most business-as-usual software builds. The joint ATO and AusIndustry software guidance is blunt that building an app with known methods is not R&D, however hard it was.
The software claims that survive involve genuine technical uncertainty, such as novel algorithms, performance frontiers, or integrations where the literature and vendor documentation genuinely could not answer whether it would work, backed by contemporaneous experiment records. "We'll write it up at claim time" is the file that fails review.
The compliance spine
What a valid claim requires
A company structure
Sole traders and trusts cannot claim, and a trust with a corporate trustee does not qualify either. Genuinely R&D-heavy businesses sometimes restructure for this alone.
Registration with AusIndustry within 10 months of year end
A hard deadline. Miss it and the year is gone, with no remission-style discretion to rescue it.
At least $20,000 of notional deductions
Unless you are using a registered research service provider.
The claim made in the company return
Through the R&D schedule. Unlodged company years with registered activities still have unclaimed refundable offsets sitting in them.
Integrity rules observed
Expenditure to associates must be paid rather than accrued, clawback applies where R&D outputs are sold, and the incentive is a standing review program. Strong claims are boring files, not big numbers.
Frequently asked questions
How much is the R&D tax incentive worth?
Can sole traders or trusts claim the R&D incentive?
Does software development qualify?
What is the registration deadline?
Can I claim R&D for past years I didn't lodge?
General information only - not personal tax, financial or legal advice. Consider your own circumstances or speak to a registered tax agent. Remission of penalties or interest and payment plans are decisions of the ATO and outcomes can't be guaranteed.