Historically, decision makers in these entities may not have considered eligibility to access the Research and Development (R&D) tax incentive, the Federal Government’s flagship R&D assistance program. Significant benefits can apply that could positively influence go/no go decisions when NTER entities consider undertaking R&D projects.
The R&D tax offset is designed to operate on a self assessment basis. NTER entities would need to self assess the eligibility of any activities conducted during an income year, to determine whether they are eligible R&D activities under Division 355 of the ITAA 1997.
The NTER Manual states that for NTER purposes, the R&D tax offset provisions in Division 355 of the ITAA 1997 will be applied with the following modifications:
- every NTER entity will be deemed to be an 'R&D entity'
- NTER entities will not be required to register R&D activities with Innovation Australia under section 27A of the Industry Research and Development Act 1986. However, NTER entities will be required to complete the approved application form for registering R&D activities and lodge that form with the NTER Administrator within 10 months after the end of the income year or such further period allowed by the NTER Administrator
- item 2 of the table in subsection 355-100(1) (i.e. a R&D entity that is controlled by an exempt entity) will be deemed not to apply to any NTER entity.
For NTER entities either undertaking R&D activities, or planning to do so, KPMG’s R&D incentives practice is well placed to support your organisation throughout the process.