R&D Tax Incentive For presentation to International House ...

R&D Tax Incentive ATY Advisory What is the R&D Tax Incentive? Australian Governments principal measure to encourage industry investment in research and development. It is a broad-based, marketdriven entitlement program that aims to boost company competitiveness, improve productivity and deliver economy-wide benefits to Australia. Jointly administered by AusIndustry and ATO.

Introduction to the R&D Tax Incentive Scheme Tax Benefits of undertaking R&D Up to 45% refundable tax credit Permanent benefit of 15 c per dollar spent on R&D activities Linking R&D activities to Tax Benefits Cash refund within 30-45 days after filing company tax return Provides R&D working capital by increasing operating cash

flow months after the end of Timeline of claiming 10 financial year for the company when R&D activities occurred Tax benefits vs. Can be obtained successively conducted R&D for multiple financial years Calculation of R&D Tax Offset - Example Tax Profit/Loss $100 000 (Add back) R&D Expenditure

-$50 000 -$100 000 -$200 000 $200 000 $200 000 $200 000 $200 000 $200 000 $200 000 Subtotal $300 000 $250 000 $200 000 $150 000

$100 000 $0 Taxable income or loss $300 000 $250 000 $200 000 $150 000 $100 000 $0 Company Tax Payable

$90 000 $75 000 $60 000 $45 000 $30 000 $0 Refundable R&D Tax Offset $90 000 $90 000

$90 000 $90 000 $90 000 $90 000 $0 $15 000 $30 000 $45 000 $60 000 $90 000

Tax Cash Refund $50 000 $0 What is the R&D Tax Incentive? Aggregated Turnover < $20M Aggregated Turnover > $20M 45% refundable tax offset 40%

non-refundable tax offset R&D Tax Incentive Application Process Submission to AusIndustry (R&D Registration) Submission to ATO (Company Tax Return Lodgement) R&D Tax Incentive Application Process Submission to AusIndustry R&D Registration Form Submission Lodged within 10 months of the end of financial year in which R&D is conducted. (April 30 for June Year Ends) Can declare future R&D to be done in future financial years with estimated

budget expense Receive Innovation Australia Registration Number Upon AusIndustry approval, receive an Innovation Australia Registration Number (IR) Use the Innovation Australia Registration Number (IR) to lodge Company Tax Return R&D eligibility criteria Is your Company a propriety limited enterprise? (ie not a trust, partnership, sole trader) Did you carry out eligible R&D activities in the past financial year? Did you incur a minimum of $20,000 in R&D expenditure?

Technical Objectives New Knowledge Technical Unknowns R&D Activities (experimentation): Core Activity Supporting Activity New products or processes to be generated by conducting the project New Knowledge

Examples: new applications, algorithms, platforms, processes, portals etc. Must not be achievable based solely on publically available information. Private information is acceptable Technical outcomes that cannot be known

without conducting experiments Technical Examples: Unknowns performance and efficiency of systems, functionality of process, integration of software etc Must have encountered technical challenges/ difficulties (not

social sciences) Development of IT products Integration of Packages Experimentation Trial runs Testing of technologies Definitions of R&D activities Activities related to core R&D or activities related to

dominant purpose of undertaking R&D Supporting R&D Core R&D Core R&D Experimentation to generate new knowledge by adopting scientific methodologies Core R&D activities may include: Development of software

Unit tests, dry test runs System integration Payments to contractors Cloud hosting/integration Supporting R&D activities may include: Literature searches or reviews that help design the experiment Background research Planning and overseeing the experiment Designing and producing test subject, equipment, prototypes etc. to be used in the experiment

Excluded Software R&D Subject to the same eligibility requirements as other R&D but with an exclusion. Software developed for an applicants internal administration are excluded as core. This may include: Business applications (payroll, accounting, invoicing, ordering, quality control, reporting, information management) Managment Information Systems Enterprise Resource Planning Software Excluded Software R&D The exclusion is not intended to apply to: Software of an applied nature (ie. that forms part of an electrical or mechanical device such as industrial equipment or consumer products) Software developed for the purpose of sale on a commercial basis

Software directly related to the delivery of services to customers Eligible expenses Staff time and corresponding wages Company Overheads License fees of software used in R&D Contractor costs including applications developed on your behalf Travel expenses Case Study Example Objective

Development of a web and mobile e-commerce application New Knowledge Technical Unknowns Integration of individual features User interface and user experience design Search engine functionality Development of new software and system enabled tools Development of live stocktake

Development of customised search engine tool New APIs and Algorithms developed Case Study Example Labour Costs $20,000 Overheads $20,000 Contractor $10,000 Other $5,000 Eligible R&D Expenditure $55,000

CASH REFUND up to $24,750 of R&D examples The following examples of IT projects that may be eligible for the R&D tax incentive: Database management Server management and cloud services Software development, including Mobile and web applications Development of portals About ATY Advisory

Our team has extensive knowledge about the R&D tax incentive. Our broad experience with a variety of industry sectors will provide us with the best possible understanding to maximise your potential tax savings. To date, we have successfully claimed over $6m in R&D expenditure ATY Advisory Team Technical Experts Analyse technical data Prepare technical deliverables Financial

Experts Senior Advisors Analyse eligible expenditure Provide insight to evaluation of regulatory systems Maximising your benefit Insight of practical and administrative protocols connected to ATO

Contingent fees Our fee structure is on a fully contingent basis. This means fees are only charged as a small percentage of a successful R&D claim, if no R&D is claimed, we will not render any fees.

Recently Viewed Presentations

  • Managing Derived Entities: Subjects and Names

    Managing Derived Entities: Subjects and Names

    Lately I have been involved primarily with VIAF and FRBR, but the boundary between what are considered topical subjects and entities is surprisingly fluid and the techniques needed to deal with subjects and names are converging. First I am going...
  • Big Data: Analytic Techniques - Shidler College of Business

    Big Data: Analytic Techniques - Shidler College of Business

    Conventional problem solving methods, rooted in 18th century physics, economics and engineering, focused on efficiency. Societal problems are fundamentally different from the types of problems that scientists and engineers deal with. Societal problems are wicked problems. BDA-* Tenets of Wicked...
  • Logitrank Based Measures of Joint Income and Wealth ...

    Logitrank Based Measures of Joint Income and Wealth ...

    Source CPS IPUMS 1965-2017 each 5th year - male population . Dependent variable. Log family income (equivalized) gap between BA holders and the others (many variants processed). (log wages "medianized" by year) Independent variables.
  • Questions & Answers (Includes links to music online)

    Questions & Answers (Includes links to music online)

    5. The Velvet Revolution is traditionally associated with which two former communist EU Member States? Czech Republic and Slovakia. Poland and Hungary
  • Balancing Equations - Muldoon Science

    Balancing Equations - Muldoon Science

    Recall Skeleton Equations. Recall: A skeleton equation takes a word equation and converts the words to chemical formulas. Balancing . Equations. The Law of Conservation of Mass says that matter cannot be created nor destroyed. That means that all the...
  • Walked in the ways of Jeroboam

    Walked in the ways of Jeroboam

    Leviticus 17:8-9 "Also you shall say to them: 'Whatever man of the house of Israel, or of the strangers who dwell among you, who offers a burnt offering or sacrifice, 9 and does not bring it to the door of...
  • LED Luminaire Training

    LED Luminaire Training

    White light is produced by color corrected blue LEDs. Color is changed by phosphors on the surface of the LED. Efficacy performance regulated by LED construction and affected by CRI and CCT. Lower CCTs and higher CRIs are associated with...
  • Library Media Pre-conference SessionPart I

    Library Media Pre-conference SessionPart I

    I will become an active participant in moving my library forward. I will recognize that libraries change slowly, and will work with my colleagues to expedite our responsiveness to change. I will be courageous about proposing new services and new...