Australia’s R&D Tax Incentive is one of the most generous innovation support programs in the world. Yet many technology companies fail to fully leverage this opportunity. In this guide, we’ll explain how to maximise your R&D tax benefits while staying compliant with ATO requirements.
Understanding the R&D Tax Incentive
The R&D Tax Incentive provides a tax offset for eligible R&D activities. For companies with aggregated turnover under $20 million, this can be a refundable offset of up to 43.5 cents for every dollar spent on eligible R&D.
What Activities Qualify?
Eligible R&D activities must:
- Be conducted for the purpose of generating new knowledge
- Involve technical or scientific uncertainty
- Use systematic investigation or experimentation
- Be conducted in Australia (with some exceptions)
Common Eligible Activities in Tech
- Developing new software algorithms or architectures
- Creating novel machine learning models
- Building new hardware or IoT devices
- Investigating new technical approaches to existing problems
- Prototyping and proof-of-concept development
Documentation Best Practices
Proper documentation is critical for successful R&D claims. We recommend:
- Maintaining detailed project records from the outset
- Documenting the hypothesis and uncertainty for each activity
- Recording time spent on eligible activities
- Preserving evidence of systematic experimentation
Working with Eronka
At Eronka, we structure our R&D projects with compliance in mind from day one. Our documentation practices help clients maximise their eligible claims while maintaining full audit readiness.