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| Research and Development Tax Rebate |
| The Government provides small companies who are currently not receiving any immediate benefit from the R&D Tax Concession scheme eg those with tax losses, with a cash rebate equivalent to the value of the R&D Tax Concession. This initiative may assist your company by providing timely support and increased cashflow when most needed. |
| The R&D Tax Rebate is available to all companies with an annual turnover of less than $5m who spend up to $1m per year on R&D. Eligible companies will be eligible to receive a cash rebate equivalent to the value of the R&D Tax Concession. The R&D Tax Rebate is 37.5 cents per dollar of eligible R&D expenditure. This refund may be reduced if the company has unpaid tax liabilities including GST, FBT and withholding taxes. Small research-intensive companies that meet the eligibility criteria can also access the 175% Premium R&D Tax Concession. |
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EXAMPLE
Assume a company in tax-loss has eligible R&D expenses of $100,000. The company has not increased its R&D intensity, and therefore it is not eligible to receive the 175% Premium R&D Tax Concession in this particular income year. |
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125% Tax Concession (a) |
R&D (37.5c) Tax Rebate (b) |
| Gross Assessable Income: |
$0 (loss) |
$0 (loss) |
| Eligible R&D expenditure: |
$100,000 |
$100,000 |
| Less R&D deductions (with125% Concession): |
$125,000 |
– |
| Taxable Income: |
($125,000) (carry-forward loss) |
$0 |
Tax liability
(30% Corporate Tax rate): |
$0 |
$0 |
| R&D rebate: |
|
$37,500 |
| Outcome for the company after R&D Tax Rebate: |
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$37,500 Cash refund |
| (a) 125% R&D Tax Concession: 125% eligible R&D expenditure deducted from gross assessable income |
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(b) R&D Tax Rebate: 37.5 cents per dollar of eligible R&D expenditure is paid less any offset against the company’s existing Commonwealth tax liabilities.
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