Innovating and R&D involves cost but that can be at least partially offset with external assistance. Numerous programs offered by federal, state and local governments are available but the stand out program is the R&D Tax Incentive scheme, offered by statutory body AusIndustry.
It stands out because each year it gives businesses more than a billion dollars to do R&D, making it the most generous innovation support program in the country. You don?t compete for the funding. If you meet the requirements, you are entitled to access the money.
At an individual company level, the R&D Tax Incentive offers a 45 per cent refundable tax offset for companies with turnovers under $20 million and a 40 per cent non-refundable tax offset for companies with turnovers above $20 million.
In this context, ?refundable? means that if you have no tax liability, then the tax offset can be refunded in cash to the company rather than carried forward to offset future tax liabilities.
For example, if a company with less than a $20 million turnover is in a tax loss position and has spent $1 million on R&D, the company may be eligible for a refund of up to $450,000.
For those companies eligible for the 40 per cent non-refundable tax offset, it equates to a net cash benefit of 10 cents for every dollar spent on R&D.
If the company is in a tax loss, it won?t be eligible for a refund but the offset can be carried forward for use against future tax liabilities. In this case, if a company spends $1 million on R&D, the net cash benefit to the company will be $100,000.
So how can you be eligible?
Obviously companies must undertake eligible R&D activities. These activities must be experimental, the outcome cannot be known in advance, they must be based on principles of established science, they must be for generating new knowledge and they must proceed from hypothesis to experimentation, observation and evaluation leading to logical conclusions.
If this still seems difficult to grasp, here are some examples that relate to quarrying, eg:
- Developing or significantly modifying equipment.
- Developing new processes to extract resources more efficiently.
- Developing new products ? for example, Wagners? earth-friendly concrete.
- Creating new ways to manage or utilise waste.
- Establishing how particular equipment performs if used in a new way.
The applications are done through AusIndustry but assistance with the application process is available through companies such as Price Waterhouse Coopers.
Sources: Price Waterhouse Coopers