The R&D Tax Incentive program

Carry out eligible R&D in your industry

The R&D Tax Incentive can provide eligible claimants with a cash refund of up to 43.5% of the amount spent annually on eligible R&D activities (conditions apply).

The Government has budgeted over AUD$2 billion in benefits available annually, and to date is the most far reaching and accessible program to support and encourage companies to undertake R&D activities.

The R&D tax program is about companies enduring the technical risk in acquiring new knowledge on new or improved products, devices, services and processes.

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The principle benefit under the program comes in the form of a tax offset which is either 43.5% refundable (payable in cash or offset against tax liability) or 38.5% non-refundable (against current or future tax liabilities).

To qualify for the refundable tax offset the eligible entity must have annual grouped turnover of less than AUD $20 million.

Note: turnover of grouped entities outside of Australia is also counted in the AUD $20 million test.

The R&D expenditure subject to the tax offset is not deductible for tax purposes. The after tax benefit therefore depends on the grouped turnover and tax position of the eligible entity as shown below:

Grouped Turnover and not be controlled by one or more exempt entities
Under AUD $20 MillionOver AUD $20 Million
Available R&D tax offset

Calculated on eligible R&D expenditure

Plus corporate tax rate#
8.5% for 0-2% of R&D intensity*
16.5% for >2% of R&D intensity*
Plus the corporate tax rate#
After tax benefit18.5% plus corporate tax rate of annual R&D spend as a refundable offset. Refund is offset against any tax payable with the balance paid in cash8.5 – 16% of annual R&D spend received as a reduction in company tax payable with any excess carried forward


Liability limited by a scheme approved under Professional Standards Legislation. This is not a substitute for independent professional advice. We do not warrant the accuracy, completeness or adequacy of the information or material in this brochure. All information is subject to change without notice. We and each party providing material displayed disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. You should make your own enquiries before entering into any transaction on the basis of information or material in this brochure. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.

* R&D intensity = R&D expenditure/total expenses

#The corporate tax rate is 25% from 1 July 2021 where a company’s aggregated turnover is below AUD $50 million and the entity is a base rate entity. Where the company’s aggregated turnover exceeds AUD $50 million or the company is a non-base rate entity the corporate tax rate is 30%.

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An eligible R&D entity includes:

  • An Australian company, or
  • A foreign company that is an Australian resident for tax purposes, or
  • A foreign company that is carrying on business in Australia through a permanent establishment and resides in a country that has a double tax agreement with Australia

Eligible R&D activities are defined as either core or supporting R&D activities.
Core activities are defined as experimental activities:

  • Whose outcome cannot be determined in advance based on current knowledge, and
  • Can only be determined by applying a systematic progression of work that is based on principles of established science, and
  • Are conducted for the purpose of generating new knowledge in the form of improved materials, products, devices, processes or services


Supporting activities need to be directly related to the conduct of core activities.

Eligible R&D activities need to be conducted in Australia. However, expenditure in relation to some overseas activities can be claimed where advance approval is obtained through an ‘overseas finding’ process.

The ‘own behalf’ rules imply that the R&D entity needs to own, control and bear the financial risk associated with the project IP. However, a change under the new program now allows the IP generated from the project to be owned by a foreign related entity.

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The R&D Tax Incentive program

How can we help

Prime can deliver the following services:

  • Undertaking an eligibility assessment on your current or planned R&D activities
  • Advice on structuring inter-company arrangements to maximise benefits under the R&D Tax Incentive program, whilst managing legal and tax issues on successfully commercialising the technology
  • Setting up the required Australian companies and providing all necessary compliance and ongoing accounting and taxation support
  • Advice on required documentation to be maintained in order to lodge a successful claim and support any audit activity that may arise
  • Preparation and lodgement of the annual claim

What our clients say

“Prime assisted us with our R&D claim under the tax Incentive rules and continue to assist with our ongoing accounting and compliance requirements. Prime understand our industry and were immediately able to make suggestions and point out issues specific to our circumstances. They made the whole process easy, efficient, and helped us get great results beyond our expectations.”

Darren Kelly
MD, PhD, Fibrotech Therapeutics


What our clients say

“First class advice and service leading to real business advisory support and growth.”

Ben Hughes, EconomX

“We’ve been with Prime now for nearly 10 years and they have always strived to understand our business needs and have contributed enormously to our growth from start-up tech to product commercialisation.”

Robert Kerr, Enopte Solutions

“Prime provides us a highly personalised service covering our financial needs. Our strategic advice has been proactively provided whilst ensuring our investments are professionally managed without requiring our daily input. We feel comfortable knowing Prime is looking after our investments.”

Ian, VIC

“In working with Prime, I have been connected with a trusted ‘go to’ source of knowledge, mentorship, tools, services, contacts and – most importantly – a friend on the ground for anything related to financial decisions when feeling a little overwhelmed.”

Amy, QLD

“The team at Prime Financial provide an excellent full service offering to my organisation. Communication between teams is excellent and they genuinely put the best interests of their clients first.”

Alan King, VIC

“I am very pleased with Prime. I have called my adviser when I have questions and have always received prompt replies and all of the support I needed.”

Bob & Denise, NSW

“We are busy running our business, which takes up most of our time! To have someone we know and trust in charge of our money is so comforting. I enjoy the quick and clear communications I have with my adviser and I trust his suggestions for our investments.”

Jack and Pauline, VIC

“Prime is a lot more that an accountant to us. They are well equipped with the knowledge to help solve any problem businesses come across.”

Gavin Lowe, UDL Group

“We have worked with Prime for fifteen years as our financial adviser. Prime has always guided us through with professional advice on our financial decisions, whether it be in the local office or over the phone. We have found our adviser, Garry, has gone above and beyond the call of duty with regards to our retirement and financial matters in a friendly and caring way.”

Karen & Russell, QLD

“I find Michelle service to me is of high value. She is knowledgeable and transfers the information to me clearly. Thank you Prime.”

Kathryn, WA

“In all the years l have had to do the R&D rebate and other grants, l have never been better looked after than here at Prime. The staff are super friendly, trustworthy and keen to get me the best result that they can. I would recommend Prime to anyone who wants to use this service. You have a client for life.”

Vern Brickman, Adverto

“We have always felt that our advisor listened carefully to what we expected and responded appropriately. Livio is always interested in us as a couple and our lifestyle- we have never felt like we were bulk handled.”

Ian & Cherie, VIC

“I have been a client of Prime for just over 3 years and I am confident that the advice and service I have received during that time has been in my best interests.”

Lannette, QLD

“Opening my own business was a relatively daunting task. Prime and their extremely professional approach were essential in ensuring that it was executed properly. I would recommend Prime to anyone looking for leading advice with great customer service.”

James Reti, Reti Consulting

“I have been using Prime for many years and one of the things I appreciate most is that their advice is only a phone call away and I always feel as a customer that Prime have my best interest at heart. It is a very personal service executed by very personable and helpful individuals. My advisor feels like family I am very satisfied.”

Christopher, ACT

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