A prerequisite to claiming such expenditure is applying for an advanced finding within the first income year in which overseas R&D activities are carried out. For companies with a June year-end the overseas finding application must be lodged with the Innovation Australia Board by 30 June 2013.
To obtain an overseas finding, a taxpayer must establish that the overseas activities:
- are covered by an advanced finding
- have a significant scientific link to core Australian R&D activities
- are not able to be conducted solely in Australia because conducting them:
- within Australia would contravene a law relating to quarantine
- requires access to a facility, expertise or equipment not available in Australia
- requires access to a population (of living things) not available in Australia or
- requires access to a geographical or geological feature not available in Australia and involve total expenditure across all income years less than the total expenditure across all income years on related Australian R&D activities (that is, constitute less than half of the total project expenditure).
Upon obtaining an overseas finding, a taxpayer must still successfully register the overseas activities with Innovation Australia within 10 months of year-end to access the R&D Tax Incentive.