The application lodgement deadline for the research and development tax incentive (RDTI) is on 2nd May 2023 (for businesses with year end of 30th June 2022). Note that business must use the RDTI customer portal to apply. This provides improved security, ability to view the status of your application in real time and indicators of approaching deadlines.
R&D Tax Eligibility Criteria FY22
Before drafting your application, it would greatly help to first check your eligibility. The following pre-registration questions would help you determine your steps prior to lodging your application.
- Are you an eligible R&D entity?
- Have you self-assessed the activities that you are claiming are eligible under the legislation?
- If you are claiming overseas activities, do you have an Overseas Finding in place for those activities?
- If your R&D expenditure is less than $20,000, did you use a Research Service Provider (RSP) to perform your R&D?
- Have you kept records to show that your activities are eligible? Check also the records you are expected to keep.
- Are you applying to register within 10 months of your company’s income year end?
You are considered an R&D entity if you are a corporation that is any of the following:
- incorporated under an Australian law
- incorporated under a foreign law but an Australian resident for income tax purposes
- incorporated under a foreign law and you are both: (i) a resident of a country with which Australia has a double tax agreement that includes a definition of ‘permanent establishment’; (ii) carrying on business in Australia through a permanent establishment as defined in the double tax agreement
You may also need to consider the special rules applied to consolidated groups and R&D partnerships.
An overseas finding is required before you can claim any offshore activities for the R&DTI. To do this, you must register your activities as part of an Australian project. An overseas finding also includes an Advance Finding about whether your overseas activities are “R&D activities”. This will give you certainty about the eligibility of your overseas activities. An advance finding is a binding decision. A background research to verify your information will be done and you will be contacted for more information to make a decision. Overseas findings must be lodged before the end of the year of claim.
Expenditure less than $20K
Your R&D activity records are vital in determining your eligibility. Whilst RDTI lodgement is self-assessed, the AusIndustry examines them to ensure compliance to RDTI claims are upheld. When you keep records to show how your activities are eligible, it is expected that the following details should be present:
- how you could not know or determine the outcome in advance
- how your R&D activities follow a systematic progression of work from hypothesis through to experiment, observation, evaluation and logical conclusions
- how the substantial purpose of conducting the activity was to generate new knowledge
RDTI Extension Request
R&D tax application deadline of 30th April is extended due to holidays in some states. The lodgement deadline for year end 30th June 2022 companies is now 02nd May 2023.
Extension requests for lodgement of FY22 R&D tax incentive must be made using the customer portal. Emailed requests are not be accepted, except under very limited circumstances. Late applications or grant extensions of time to apply for an Advance Finding or Advance Overseas Finding under any circumstances are not allowed.
When requesting an extension of 14 days or more before your deadline, or an extension of any period of time after your deadline, you must provide the following:
- the reasons you could not submit your application by the deadline
- the reasons for any delay in requesting an extension to the deadline
- evidence to support your reasons
The reasons for the extension request must not be:
- your fault or the fault of anyone acting on your behalf
- within your control or within the control of anyone acting on your behalf
You’ll need to justify the amount of additional time you’re requesting. The longer the extension, the stronger your explanation and evidence needs to be. Extensions will only be given/granted when either:
- the circumstances are exceptional
- the delay is minor
Note that the process will not automatically result in you getting an extension.
The RDTI is an incentive program that encourages more R&D activities to keep organisations competitive, if not industry disruptive, in today’s rapidly shifting landscapes. Our free R&D Tax Incentive ebook will give you a better view of what this tax rebate scheme is, what core activities may look like, and pro tips on how you can maximise your claims.
Talk to Us
We at Treadstone have over 14 years of experience preparing R&D Tax Incentive claims and can assist in making sure you receive your maximum rebate. We can assist with lodgement and extensions.
Working with us means you get the maximum grant with minimum risk and effort. Our expertise includes R&D Tax Incentive registration and tax schedules, Export Grants, Capital Expenditure and Infrastructure Grants.
Get in touch with us and let’s discuss this more in detail.
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