Research & Development (R&D) Tax Incentive FAQ

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    The R&D Tax incentive scheme replaced the R&D tax concession scheme on the 1st of July 2011.

    Some questions have been posed regarding the application of the scheme that we have listed below.

    Deductibility of Expenditure

    I have registered under the R&D Tax Incentive scheme. Can I claim some of my R&D expenditure under a different section of the Income Tax Assessment Act?

    Under the previous R&D concession scheme, you were able to choose to claim a deduction under a different provision. However, under the new R&D Tax Incentive scheme, you cannot choose.

    Payments to Associates

    Under the R&D Tax Incentive, I can only obtain an R&D tax offset for expenses paid to an associate if it is ‘paid.’ I have issued a cheque on the 30th of June, but it was banked on 2nd of July. Does this constitute payment?

    A cheque is considered to be paid when a recipient receives it. If it is promptly banked, then it helps demonstrate the cheque was received on the 30th of June. However if a significant delay occurs in banking the cheque, then the ATO will consider it paid when it is presented and cleared.

    Can a journal entry between entities constitute payment?

    In a word, no.

    Are there any other guidelines with what constitutes a payment?

    An amount ‘paid’ has its general legal meaning. There are a number of ATO interpretive decisions, rulings, and cases that can be used to ascertain the meaning in your particular circumstances.

    What to do next

    If you are claiming R&D Tax concessions, we engage an expert R&D consultant to assist in the preparation of the claim. The best advice is to start the process early, as delays in refunds are often 6 weeks to 3 months in duration.

    Hillyer Riches are Melbourne Accountants practice. Contact us today or email

    This article is for general information only and should not be relied upon w

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