Maximise Your R&D Tax Incentive
If your company has undertaken Research and Development (R&D) activities in the 2025 tax year where the outcome was uncertain and which required systematic experimentation, you may be eligible for the R&D Tax Incentive. This program rewards innovation by providing tax offsets that can improve the cash flow of your business. Now is the ideal time to review your projects to ensure you don’t miss out on claiming the R&D.
What Qualifies as R&D?
To qualify, activities must meet strict eligibility requirements. Core R&D Activities are experimental activities where the outcome is not known in advance. These activities must follow a systematic progression of work, based on scientific principles, moving from hypothesis to experiment, then to observation and evaluation. The process should lead to logical conclusions and generate new knowledge.
If your business has been developing new systems, experimenting with product designs, or solving technical challenges where results weren’t certain, you may qualify.
How the Incentive Works
Companies with turnover under $20 million are eligible for a refundable offset of 18.5% above the corporate tax rate, leading to total refundable offsets of either 43.5% or 48.5%.
Companies with turnover over $20 million are eligible for a non-refundable offset calculated on based on the intensity of the R&D:
- 38.5% for expenditure up to 2% of total spend, and
- 46.5% for expenditure above 2% of total spend.
How Prosperity Can Help
Our Tax team provides specialist advice on the R&D Tax Incentive, guiding clients through every step of the process, including:
- Eligibility Assessment – Determining whether your activities qualify as R&D, and whether your business is entitled to the refundable or non-refundable offset.
- Maximising Deductions – Working closely with your team to identify eligible projects and develop strategies to maximise the notional deductions.
- Application Support – Drafting clear, robust submissions to AusIndustry that demonstrate the hypothesis, experimentation, and new knowledge generated by the R&D undertaken by your company.
- Tax Return Compliance – Preparation of the R&D Tax Schedule for inclusion in your annual tax return.
- Broader Innovation Support – Assisting early-stage businesses with the Early Stage Innovation Company (ESIC) concessions, including structuring advice and lodging private rulings to confirm eligibility.
Our integrated approach ensures clients can leverage both R&D and ESIC benefits to support growth and innovation.
Take Action Now
If you’ve undertaken R&D Activities your business may be entitled to significant tax benefits. Acting early ensures compliance and maximises your claim.
Contact Prosperity today to discuss your R&D eligibility and submission requirements.
Reach out to Michael Kinniard at mkinniard@prosperity.com.au or speak with your Principal Adviser.