If you have not set up a company yet, it should be considered that only a Pty Ltd or Ltd company is eligible.
Based on this, you are not eligible at this time. However, please continue with the rest of the questionnaire as it may provide other important information.
Financial and technical risk may be incurred in proving the technology can deliver what it promises in order to be eligible to claim for R&D.
For example: Prototyping and Iteration – In the field of product development, R&D often involves experimentation with different design concepts, selecting the most effective design and developing and testing prototypes. A team might build multiple prototypes with different features, functionalities, or materials, and then conduct user testing or controlled trials to gather feedback and assess usability & performance, and the ability to meet certain technical objectives.
For example: Would an experienced & competent professional in your field be able to tell you the method, process or design required for your innovation and be able to predict the resulting outcomes of testing without needing to conduct any actual experiments or work? The outcomes of the core activity / R&D testing process must be unknown or unknowable to be eligible for an R&D claim.
This applies to technology developed in Australia and/or overseas. If the technology already exists overseas, and you are simply replicating it or adjusting nominally for Australian conditions, it is unlikely your R&D project meets the eligibility requirements.
If your company has developed an innovation for another company that completely owns or controls your intellectual property (IP), you will not be eligible. Your company must either own the IP or have ‘effective control’ of it to be eligible.
The ATO requires applicants to maintain adequate records in relation to their R&D expenditure and also to be able to show a link between the expenditure and the related core or supporting activity that forms part of your overall R&D project. This includes:
– Proper keeping of accounting records covering all aspects including supplier information, item details and dates around related R&D expenditures. It is advisable to use a suitable accounting package, like Xero or MYOB, to keep these accounting records.
– All persons conducting R&D work are required to log timesheets.
– Records of all invoices made out to contractors involved in your R&D, and other artefacts, such as contracts, proposals and so on.
– Linkage of the expenditure to core or supporting activities that form part of your R&D project. (Note: you will be claiming for the costs of the core or supporting activity, not necessarily your total R&D project expenditure.)
– Click here to access the calculator
To be eligible to claim R&D, your company needs to have an annual R&D expenditure of $20,000 or over.
