This track is for accountants, tax agents and R&D consultants who prepare or review R&D Tax Incentive claims for Australian clients. The incentive gives companies a tax offset for eligible R&D expenditure and is jointly administered by the Department of Industry, Science and Resources, on behalf of Industry Innovation and Science Australia, and the Australian Taxation Office. Three features change the practitioner's work: the claim is made activity by activity; every year's activities must be registered with the department within 10 months of the end of the income year before the offset is claimed in the company tax return; and the department's findings on eligibility bind the Commissioner of Taxation. Proposed changes from 1 July 2028, announced in the 2026-27 Budget, are not yet law; current rules apply until then.
How the Australia rules change the program
| Module | What is different in Australia | Country page |
|---|---|---|
| Legislation and guidance | Income Tax Assessment Act 1997 Division 355; Industry Research and Development Act 1986 Part III; the department's Guide to Interpretation; the ATO's schedule instructions and rates page. | Australia guide |
| Eligibility analysis | Core R&D activities are experimental activities whose outcome cannot be known in advance from current knowledge, following a systematic progression from hypothesis to experiment, observation and evaluation, leading to logical conclusions, to generate new knowledge. Supporting activities are directly related to a core activity. | Core vs supporting activities |
| Advanced calculations | Notional deductions, then the offset: corporate tax rate plus 18.5% (refundable) for aggregated turnover under A$20 million; plus 8.5% (R&D intensity up to 2%) or 16.5% (above 2%), non-refundable, for A$20 million or more. Minimum A$20,000; threshold A$150 million a year. | Refundable vs non-refundable |
| Technical interviews | The registration form requires for each core activity the new knowledge intended, the existing knowledge and sources investigated, the hypothesis, the experiment, how results were observed and evaluated, and the conclusions. The department may follow up with a site visit or meeting with the technical staff. | Documentation |
| Reports and narratives | Two documents: the registration application describing each core and supporting activity, and the R&D tax incentive schedule reporting notional deductions by category, the registration number and the offset. | Registration with AusIndustry |
| Disputes and audits | The department may examine registered activities and make findings under section 27J that bind the Commissioner, issuing a proposed finding first. Internal review within 28 days, then the Administrative Review Tribunal. The ATO reviews the expenditure and the calculation of the offset. | ATO and department reviews |
| Ethics, integrity and fee arrangements | The customer portal is accessed by the company or an authorised tax agent or R&D consultant, and the department selects registrations for examination on a risk basis. Whether contingent fees are permitted depends on the professional body the advisor belongs to; see knowyourfees.org. | Why claim integrity matters |
Forms and deadlines
| Form or step | Deadline or rule | Country page |
|---|---|---|
| Registration of R&D activities | Within 10 months of the end of the income year, through the R&D Tax Incentive customer portal, every year. The department may extend the deadline in limited circumstances; late applications without an extension are refused. | Registration with AusIndustry |
| Advance Finding or Overseas Finding | Application before the end of the income year in which the activities are conducted. | Advance and overseas findings |
| Company tax return with the R&D tax incentive schedule | Due dates range from 31 October to 15 May after the end of the income year depending on the entity and whether it lodges through a tax agent. | How to claim |
| Amendment of assessment | Within 2 years for a small business entity or 4 years for other taxpayers, measured from the day the notice of assessment is given. | Deadlines |
| Review of a finding | Internal review within 28 days of notice, then the Administrative Review Tribunal. | Reviews and audits |
| Records | 5 years from the date the return was lodged or the record was prepared, whichever is later. | Documentation |
Key rules to know
Register activities, not projects. A registration must include at least one core R&D activity. Registration of activities does not amount to a decision that the activities are eligible; the Board may later examine them and make a finding.
Supporting activities carry a purpose test. A supporting R&D activity that is an excluded activity, or that produces or is directly related to producing goods or services, qualifies only if undertaken for the dominant purpose of supporting core R&D activities.
At whose risk, and where. Expenditure is not eligible where the R&D activities are conducted to a significant extent for another entity, or where another entity bears the financial risk and effectively owns the results. Activities outside Australia are eligible only where covered by an Overseas Finding. Expenditure incurred to an associate is notionally deductible only when it is paid.
Turnover and intensity are group tests. Aggregated turnover includes the annual turnover of connected entities and affiliates, including foreign entities. R&D intensity is the entity's notional deductions divided by its total expenses for the income year, and the premium is applied marginally: notional deductions up to 2 percent of total expenses receive the 8.5 point premium and the excess receives the 16.5 point premium. See R&D intensity.
Worked example
Illustrative example. Murray Instruments Pty Ltd, a hypothetical base rate entity with a 30 June 2026 income year, aggregated turnover of A$8 million and a tax loss for the year. The engineers' notebooks support two core activities and two supporting activities, which the practitioner registers through the customer portal in February 2027, before the 30 April 2027 deadline. Salary expenditure of A$500,000 is apportioned from timesheets, an unrelated contractor was paid A$150,000, an associate company invoiced A$100,000 of which A$60,000 was paid by 30 June, the decline in value of test equipment used for R&D is A$50,000, and apportioned overheads are A$40,000.
| Step | Amount |
|---|---|
| Salary, contractor, decline in value and overheads | A$500,000 + A$150,000 + A$50,000 + A$40,000 = A$740,000 |
| Associate expenditure, notionally deductible only when paid | A$60,000 (the unpaid A$40,000 is held over) |
| Notional deductions | A$800,000, above the A$20,000 minimum and within the A$150 million threshold |
| Refundable offset: 25% corporate tax rate plus 18.5% = 43.5% | A$348,000, refunded on assessment because the company is in a loss |
The method choice is the unpaid associate amount: the practitioner advises the client to pay the A$40,000 in the 2026-27 income year and claim it when paid, rather than deduct it under ordinary provisions and forgo the offset. The R&D tax incentive schedule quotes the registration number with the company tax return.
Related country guide pages
Self-check questions
Answer each question, then open it to compare.
A client with a 30 June 2026 income year asks you in May 2027 to prepare its first claim. What is the position?
A base rate entity with aggregated turnover of A$6 million has notional deductions of A$400,000 and is in a tax loss. What is the offset and is it paid?
A client registered one core activity described as the development of its new platform. What will an examiner look for, and what is the risk?
An associate company invoiced your client A$100,000 for R&D services in the income year but only A$60,000 was paid by year end. How much can be notionally deducted this year?
A client wants to claim offshore testing by a contractor. What must be in place?
Official sources
- How to register for the R&D Tax Incentivebusiness.gov.au
- Guide to Interpretation (R&D Tax Incentive)Department of Industry, Science and Resources
- Rates of R&D tax incentive offsetAustralian Taxation Office
- Income Tax Assessment Act 1997, Division 355Federal Register of Legislation
- Industry Research and Development Act 1986, Part IIIFederal Register of Legislation
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Educational content only, not tax advice. See the disclaimer.