Finance for R&D Tax
Credits
Companies that conduct research and development are in high demand. They contribute to the growth of a strong economy. The Australian government has created an initiative called the Research and Development tax incentive to encourage such businesses. This is an improvement over the tax break for research and development that was available until mid-2011. Continue reading to learn more to understand Rimon’s R&D tax incentive grant better.
What exactly is the
R&D Tax Credit?
As the name implies, it is a tax credit given to companies working in the research and development sectors. The primary goal of providing this incentive is to encourage companies and businesses to conduct research and development activities that they would not have done otherwise and provide incentives to run the business with fewer complications. This program is a collaboration between ATO and AusIndustry to support innovative economic research and development.
Criteria for
Eligibility:
If your company is engaged in technology research and
development, the outcome of which is difficult to predict, you may be eligible
for this benefit.
Your project activities progress from experiments to
observation, evaluation, and finally, some logical conclusions. Because the
outcome is uncertain, these activities are fraught with danger. This benefit is
available for activities that are governed by the principles of established
sciences and technologies.
These activities should also benefit the larger masses of
the population rather than helping a single person/company/organization.
Offset taxation:
If your company meets the eligibility requirements, you
can also claim the tax offset through the R&D tax credit incentive. There
are two critical aspects of the R&D Tax Credit Offset to consider:
Whether or not you are
subject to the exempt entity's jurisdiction.
If your turnaround exceeds $20 million.
These two factors will determine your tax credit
incentive.
Finance through Tax
Credits:
a. What exactly is R&D tax credit financing?
It is difficult to sustain in this business because
R&D activities are subject to so many uncertainties. However, there are now
a large number of institutions willing to fund your R&D activities.
However, when considering Tax Credit Finance, your company must consider some
essential financing terms and conditions. It is also critical to ensure that
the charges levied, the financial interest rate, and the general terms and
conditions meet the specific needs of your research and development activities.
b. How does it benefit your business?
When R&D activities receive such financial
assistance- in the form of R&D Tax credit financing- it allows the company
to:
Increase your involvement in research activities by not
worrying about capital raising options.
Increase your resources and time spent on such
activities.
Advance technology and its applications to create
commercially viable products that benefit the majority of society.
