A significant benefit of the new R&D incentive is that
applicants can obtain an advance finding of whether their
activities are eligible R&D activities. This is important as it
provides some comfort in respect to whether they will benefit from
The Application for Advance Findings form, which determines
whether activities are eligible R&D activities, has now been
made available following the registration of the Industry Research
and Development (R&D) Regulations 2011 on 25 November 2011.
The advance finding is applied for prior to the registration of
activities, and will determine whether an activity is a core
R&D activity, a supporting R&D activity, or neither a core
nor supporting activity. The finding provides certainty for
applicants as it:
Binds Innovation Australia to register activities that the
finding has determined as eligible; and
Binds the Australian Tax Office (who administer the tax offset
through the income tax return) to treat the activities as R&D
activities when making a decision about whether expenditure
associated with the activity is R&D expenditure.
Applications are due before the end of the income year in which
the R&D activity was conducted or commenced, and will apply to
that income year and the next two income years. The finding can
only be relied on where the activities conducted are not materially
different to the activities described in the advance finding.
The advance finding is neither a pre-condition for the
registration of activities, nor does it replace registration. It
will not benefit those companies who are confident their activities
are eligible R&D activities.
Under the R&D incentive, applicants can now obtain a R&D
incentive where part of the R&D activities are conducted
overseas, provided the following conditions are met:
The company receives an advance finding that the activity is an
eligible R&D activity.
The overseas activity must have a significant scientific link
to one or more core R&D activities conducted in Australia. The
Australian activities must be registered or be reasonably likely to
be conducted and registered with Innovation Australia.
The overseas activity cannot be conducted solely in Australia
Conducting it requires access to a facility, expertise or
equipment not available in Australia;
Conducting it in Australia would contravene a law relating to
Conducting it requires access to a population (of living
things) not available in Australia; or
Conducting it requires access to a geographical or geological
feature not available in Australia.
The total amount to be spent in all income years on the
overseas activities is less than the total amount to be spent on
R&D in Australia.
For a copy of the 'Application for Advance or Overseas
Findings' on the AusIndustry website, please
The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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