Innovation is a challenging endeavour that requires significant time, commitment, and resources. Successfully developing a product from ideation to commercialisation is no easy feat, and it can put a significant strain on a business’s cash flow. This is where the Research and Development (R&D) tax incentive program can work wonders for eligible Australian companies.

The R&D tax incentive program enables businesses a tax benefit, based on the size of their business, whether they are in a profit or loss, and how much money they have spent on R&D:

1. Companies with an aggregated turnover under $20 million are at a tax rate of 25% will receive a refundable tax benefit / payment of 43.5 cents for every dollar invested in valid R&D projects, or a tax credit of 18.5% if they are in profit.
2. Companies with an aggregated turnover between $20 to $50 million are at a tax rate of 25% will receive a non-refundable tax benefit of up to 38.5 cents in the dollar if they are in a loss, or have carry forward losses to a certain amount. The R&D benefit is equivalent to 8.5% of eligible R&D expenditure which accounts for up to 2% of total company expenses and an additional 16.5% on eligible R&D expenditure exceeding the 2% baseline.
3. Companies with an aggregated turnover of more than $50 million are on a tax rate of 30% will receive a non-refundable tax benefit on eligible R&D expenditure up to 2% of total company expenses and an additional 16.5% on eligible R&D expenditure exceeding the 2% baseline.

This program helps innovative entities keep the innovation accelerator on and bring their product to fruition much earlier than would otherwise have been achievable.

This incentive addresses funding shortfalls and has helped over 14,000 businesses each year on their path to successfully launching their products and services. If you’re innovating a new product, device, or other technological solution, you may be missing out on vital financial incentives that can give your project the support it needs.

Case Study:

One example of a successful R&D project is Ezybandz, a global medical alert platform. Founder, Tony Martelli, is developing wristbands fitted with modern technology and proprietary software platforms focused on the digital health sector. The device aims to support people living with chronic medical conditions and disabilities to address their physical, psychological, social, and financial needs. The R&D program has helped Martelli bring his device to fruition and make a real impact.

Imagine an instance where an aged person with a medical condition has left their place of care, got lost, and may now be injured from a fall. Unfortunately, this exact instance occurred in 2021 when a 65-year-old man with dementia was reported missing. After a 17-day search, he was found having passed only a few metres to the side of the road. If he had been wearing Tony Martelli’s next-generation medical device, not only would the man have been found much faster using a location tracker, but paramedics would have been aware of his underlying health conditions immediately by simply scanning the device.

If you’re in the industry of innovation, it’s worth considering whether your project meets the eligibility criteria for the R&D tax incentive program. This program can be a valuable tool for businesses looking to make their innovative ideas a reality.

Specialist R&D Tax Agents can provide case-by-case advice to support the development of your innovation, and the Australian government has implemented several incentives to encourage innovation among Australian companies.

Use Innov8tion’s helpful online tool in the Resources tab to determine your company’s eligibility to further support your innovation development.

Innovation is critical to the success and growth of Australian businesses, and the R&D tax incentive program provides the support needed to make it a reality. Take advantage of this valuable resource and bring your innovative ideas to life.

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To find out if your company may be eligible to claim an R&D tax incentive, or if you are already claiming the R&D tax incentive and would like to receive a complementary review, please let us know: