R&D Tax Facts – February 2025
Our R&D Tax Facts is a summary over the previous quarter of developments in the world of the R&D Tax Incentive (R&DTI) program. Detailed information can also be found on the Insights section of our website.
R&D Tax Incentive update: Gambling and Tobacco Companies no longer welcome
In case you missed it - the Australian Federal Government has announced as part of the 2024-25 Mid-Year Economic and Fiscal Outlook that gambling and tobacco companies will no longer be able to access the R&D Tax Incentive. See details here.
Important deadline reminder
Eligible R&D activities undertaken by June year end businesses between 1 July 2023 and 30 June 2024 need to be registered with AusIndustry by no later than Wednesday 30 April 2025. Registration of R&D activities is a vital step in the process required to access an R&D tax offset via your annual tax return.
In their January 2025 update, AusIndustry recommends lodging R&D applications now, instead of waiting for the deadline. Applications lodged in the lead up to 30 April face longer processing times, which can impact on the ability to lodge associated tax returns.
ATO Taxpayer Alert
On 10 December 2024, the ATO released TA 2024/1: Early stage investor tax offset claimed using circular financing arrangements.
The Alert notes that the ATO are currently reviewing cases where individuals have claimed the early stage investor tax offset on shares acquired through tailored financing arrangements. These arrangements appear designed to artificially meet the conditions for claiming the maximum tax offset, allowing individuals to benefit with minimal (if any) risk on their investment. Entities promote, orchestrate, and finance these schemes primarily for the individuals to obtain the tax offset, with the refunded offset shared with those entities.
Details of arrangements that the ATO are looking at are set out in the Alert. We recommend that companies taking advantage of the early-stage investor tax offset review any arrangements in place to ensure they do not fall foul of the ATO’s alert and guidance.
Grant landscape update
The opening of Round 17 of the Cooperative Research Centres Projects (CRC-P) Grants was announced last week. Details can be found here.
CRC contributions are also treated favourably under the R&D tax program - recipients can claim cash contributions as notional R&D deductions. Non-monetary or ‘in-kind’ contributions (for example, plant used in the R&D activities), can also be valued and treated as R&D expenditure.
Applications close 20 March 2025. Speak with your Internet Labs advisor if you are interested in applying for CRC-P.
Read more about the billion-dollar opportunity in research collaboration. Our Lab’s Collaboration Management team can provide assistance with facilitation of industry and research organisation partnerships, including the governance of agreements and ongoing management.
Also check out our insights around MRFF grants with key trends and success rates detailed here.
Please contact us if you’re keen to learn more or if you require assistance.