Australia R&D Tax Incentive

Australia R&D Tax Incentive

Funds Australian companies through tax incentives that reward innovation investment and reduce financial risk.

The Australian R&D Tax Incentive (R&DTI) is a federal entitlement program co-administered by AusIndustry (within the Department of Industry, Science and Resources) and the Australian Taxation Office (ATO). Companies first register their R&D activities with AusIndustry through the customer portal; the ATO then delivers the benefit as a tax offset applied through the company tax return. The program operates under current rules until 30 June 2028, when changes announced in the 2026–27 Budget will take effect.

The offset rate depends on company size. Companies with aggregated annual turnover below AUD 20 million receive a refundable tax offset equal to their corporate tax rate plus 18.5 percentage points — delivering an effective benefit of approximately 43.5 cents per eligible dollar for most small companies. Larger companies receive a non-refundable offset equal to their tax rate plus 8.5 percentage points, which can be carried forward if not used. Eligible expenditures cover both core R&D activities (experimental activities whose outcomes are not known in advance) and supporting R&D activities. Overseas R&D may be included if an overseas finding is obtained in advance. The public source states a tax offset for R&D expenditure of up to AUD 150 million; it does not publish a minimum benefit amount.

The R&DTI is sector-agnostic and open to any incorporated Australian entity subject to Australian tax. There is no competitive selection and no application deadline; the annual registration window closes 10 months after the end of each income year. Research service providers (RSPs) registered with AusIndustry can conduct eligible R&D on a company's behalf, and companies may apply for advance findings to confirm activity eligibility before incurring costs.