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Commonly R&D activities and costs conducted outside of Australia during a financial year are not eligible to be included in your RDTI claim.
There are certain circumstances where R&D activities undertaken overseas, and the associated costs may be able to be considered under the RDTI. For this, you must first apply for an Overseas Finding. An Overseas Finding includes an Advance Finding about whether your overseas activities are ‘R&D activities’.
Importantly, an application for an Overseas Finding must be submitted before the end of the financial year in which you conduct (or plan to) the activity. For example, the upcoming deadline for a company looking to submit an Overseas Finding for the June 2024 financial year, is 30 June 2024.
In addition to the general legislative eligibility criteria of the RDTI (including an eligible R&D core or supporting activity), all of the following conditions need to be met for a Finding to be made that R&D activities conducted overseas are eligible under the RDTI:
The Overseas Finding Application must detail information about each overseas R&D activity and demonstrate how each activity meets the conditions outlined above. Evidence and documentation are necessary to provide support for the information outlined and reasons provided. The application will be reviewed upfront, and the company will be contacted to advise the finding(s), this process can take at least 72 days from lodgement.
Even if a positive finding(s) is received that your overseas R&D activity is eligible and covered by an Advance / Overseas Finding Certificate from AusIndustry, the overseas R&D activities must also be registered annually with AusIndustry within 10 months of the end of the financial year that the activity was conducted.
Overseas Findings generally last for the duration of the activity. If you have an Overseas Finding Certificate from prior years, it is critical that the information provided in the application continues to hold true in relation to the activities to be undertaken and the estimate of the amount of costs provided. For example, you should ensure that the activities being performed overseas in 2024 do not materially deviate from those covered by the Certificate.
Get in touch with Grant Thornton’s Innovation Incentives team to discuss a possible 2024 R&D Overseas Finding before the lodgement deadline of 30 June 2024.
With the 30 April 2026 registration deadline approaching, companies that performed R&D activities in the year ended 30 June 2025 should be reviewing eligibility, documentation and governance now to preserve their entitlement under the RDTI.
R&D Tax Transparency insights driving innovation in Australia’s agribusiness and food sector.
The Australian Government has released exposure draft legislation proposing to exclude certain tobacco, vaping and gambling-related activities from the Research and Development Tax Incentive (RDTI). The intent is to ensure public funding does not support innovation that promotes harmful consumption behaviours, while maintaining eligibility for genuine harm-minimisation initiatives.
