The Research and Development Tax Incentive (RDTI) program is designed to encourage businesses to invest in R&D activities by providing a tax offset for eligible R&D expenditure. However, the application process for the RDTI program can be complex and time-consuming, and it is important for businesses to be aware of the relevant timelines in order to ensure that they are able to claim the tax offset.
Apply to register: Once a company has determined that it is eligible for the RDTI program, it can apply to register for the program with AusIndustry through the RDTI portal. This registration application can be submitted as soon as you like following the completion of the income year in which the activities were undertaken and paid for, but MUST be submitted within 10 months after the end of the income year in which the R&D expenditure was incurred. For most companies in Australia the financial year ends on 30th June, which means the RDTI application deadline is 30th April the following year. For companies whose financial year is aligned with the calendar year, then the closing date will be 31st October of the year following the end of their financial year.
Notification of RDTI registration number: After registration of a company’s R&D activities with AusIndustry, the company will receive a registration number. This will normally be within 2 weeks of submitting the registration application, but could take longer depending upon whether AusIndustry decides to review the application.
Lodging the R&D Tax Incentive Schedule: Once the registration number is received, businesses can then lodge their RDTI schedule together with their tax return, with the Australian Taxation Office (ATO).
ATO's assessment: Once the tax return has been lodged, the ATO will review and assess the tax return and may request additional information or clarification from the business during this process. If the business has already lodged its tax return for the year, it can lodge the RDTI schedule as an amendment to its tax return.
ATO Notification: Provided that the ATO is satisfied with the particulars of a company's tax return, the business will receive a tax offset for eligible R&D expenditure, which can be in the form of a tax rebate or cash back to the company.
Oversea Expenditure: Should a company incur overseas expenditure for R&D activities, both the timelines for submission and the process for submitting an application are different than for expenditure incurred on R&D activities solely in Australia. This will be the subject of a future article, but the major difference regarding timelines is that an Advance and Overseas Finding (AOF) application must be made prior to the end of the financial year in which the activities are undertaken and expenditure incurred.
In summary, the key timelines associated with the RDTI program in Australia include planning and conducting R&D activities, registering the R&D with AusIndustry and then submitting the R&D expenditure schedule with your tax return to the ATO in order to receive your tax rebate. It is important for businesses to be aware of these timelines in order to ensure that they are able to claim the RDTI tax offset in a timely manner. Planning ahead is critical to getting the best results.
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