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About the R&D tax incentive

The R&D Tax Incentive operates as a tax credit, rewarding businesses and individuals who perform R&D activities.

Key features include a:

  • 15% tax credit available from the beginning of a business’ 2020 tax year
  • minimum eligible R&D expenditure of $50,000 a year
  • maximum eligible R&D expenditure of $120 million a year
  • definition of R&D to span more sectors
  • limited form of refunds in the first year.

The sole purpose of research and development is to seek to solve scientific or technological uncertainties.

R&D tax credit eligible R&D activity guidance - March 2021

R&D has a specific statutory definition for the purposes of tax credit which is not the same as the commercial, engineering or accounting definitions. The tax credit is not just for scientific research but also for development activity that meets the eligibility criteria.

This guidance introduces core R&D activities. If you have core R&D activities, you may also receive the tax credit for supporting R&D activities which are referenced later in the guidance.

For more information about the incentive, consult the guidance material.


You must be eligible in all three of the following criteria to qualify. Find out more about whether you could be eligible here:

Eligible R&D activities

Eligible R&D entities

Eligible R&D expenditure

Research in the following fields is excluded from eligible R&D:

  • social sciences
  • arts
  • humanities
  • market research for your product or service.

For more information about the incentive, consult the guidance material.

Important:

The screenshots are of the R&D tax incentive returns and are to be used for reference and guidance only.

These returns are available in myIR to R&D tax incentive enrolled customers.

All R&D tax incentive returns and forms must be filed electronically.