Payday Super – Legislation introduced for concessional cap transitional rule
New Payday Super legislation addresses concessional contributions cap issues for 2026/27, but salary sacrifice and early payments remain key concerns.
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By: Rebecca Iwanuscha, Bianca Patrick
15 Feb 2023 4 min read
If your company has incurred expenditure on the development or improvement of a new product, process and/or service and the costs were incurred in Australia, it may be eligible to access the Federal Government’s R&D Tax Incentive program (RDTI).
The types of costs that could be eligible include, salary & wages, contract expenses, overheads (e.g. rent, electricity) and other direct costs where there is a direct link to a registered R&D activity.
The RDTI has several levels of support including a refundable offset equal to the company’s corporate tax rate plus an 18.5% premium where annual aggregated turnover is less than $20 million (grouping rules apply). In some cases, this could result in a cash refund from the ATO.
Alternatively, if turnover is greater than $20 million (grouping rules apply) the offset is non-refundable but can be carried forward. The offset rate is equal to the company’s corporate tax rate plus 8.5%, up to 16.5% determined by the R&D intensity for the income year. The higher rate is available to companies that achieve an R&D intensity of greater than 2% of their total expenses.
Generally, only R&D activities conducted in Australia qualify for the RDTI. However, there are circumstances where R&D activities conducted overseas may qualify (if specific requirements are met).
In order to claim overseas activities and the subsequent costs, an Overseas Finding Application must be submitted before the end of the financial year the activities were conducted in, (i.e. for June year ends, a FY23 Overseas Finding must be submitted no later than 30 June 2023). A positive Overseas Finding provides assurance that the overseas R&D activities described in the finding application will be eligible for claiming under the R&D Tax incentive.
Post COVID, we are seeing an increase in ATO Combined Assurance Reviews (CARs) as well as RDTI reviews and queries from both the ATO and AusIndustry.
Taxpayers generally only have a limited window to respond to the regulators, so it’s more important than ever to ensure that sufficient governance procedures are in place and that contemporaneous documentation to substantiate the eligibility of both the R&D activities and the associated expenditure is readily available.
Our national specialist team has strong experience supporting companies across all sectors with accessing the RDTI, applying for Overseas Findings and assisting with queries from the regulators. Our specialists can assist with:
Contact us or your Grant Thornton representative to learn more about how we can assist your business.
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