Accessing the benefit requires careful alignment with both AusIndustry technical criteria and ATO tax law. We help you get it right.
Prime Innovation, a specialist division of Prime Partners, helps businesses assess eligibility, structure defensible claims and implement documentation that withstands regulator scrutiny. We work with companies undertaking product development, software engineering, manufacturing improvement and technical experimentation across Australia, on a fixed fee, never a percentage of your refund.
The Research and Development Tax Incentive is the Australian Government's flagship program for encouraging business innovation, administered jointly by AusIndustry and the ATO. If your company meets the eligibility criteria and conducts qualifying R&D activities, you are entitled to claim the offset. No application is assessed on merit, the entitlement follows from eligibility. We charge a fixed fee for the work, which the ATO views as lower-risk than the contingency arrangements some advisers use.
An Australian incorporated company, or a foreign corporation that is an Australian resident for tax purposes. Trusts, partnerships and sole traders are not eligible to claim directly.
Experimental work where the outcome cannot be known in advance. Core R&D activities must follow a systematic progression from hypothesis to experiment, observation and evaluation.
Employee wages, contractor payments, materials, software and depreciation on assets used for R&D. A minimum of $20,000 in expenditure is generally required.
The rates and structure differ based on your company's aggregated turnover.
| Component | Rate |
|---|---|
| Company tax rate (base deduction) | 25% |
| R&D premium | +18.5% |
| Total R&D tax offset | 43.5% |
This offset is refundable. If your company is in a tax loss position, the full 43.5 percent is received as a cash refund from the ATO, which is particularly valuable for startups and early-stage companies that are not yet profitable.
| Eligible R&D spend | Profitable, net benefit at 18.5% | In losses, cash refund at 43.5% |
|---|---|---|
| $100,000 | $18,500 | $43,500 |
| $250,000 | $46,250 | $108,750 |
| $500,000 | $92,500 | $217,500 |
| $1,000,000 | $185,000 | $435,000 |
| $2,000,000 | $370,000 | $870,000 |
For a profitable company the net benefit is the 18.5 percent premium above the standard 25 percent deduction it would receive regardless. For a company in losses, the full 43.5 percent is received as cash, since the base deduction has no current value when there is no taxable income to offset.
| R&D intensity | Offset rate |
|---|---|
| Up to 2% of total expenditure | Company tax rate + 8.5% |
| Above 2% of total expenditure | Company tax rate + 16.5% |
The non-refundable offset can be carried forward to offset future tax liabilities. Eligible R&D expenditure is capped at $150 million per financial year.
Technical knowledge combined with tax and accounting expertise, so claims are accurate, compliant and maximised within regulatory boundaries.
As R&D activity scales, many innovation-led businesses also draw on business structuring and review to keep new IP within an appropriate corporate structure, growth and expansion advisory for financial modelling and board reporting, and the Finance Hub to track R&D expenditure in real time via Xero and integrated tools. Where relevant we also help identify innovation grants that complement R&D claims, including Export Market Development Grants, the Industry Growth Program, the Medical Research Future Fund, state-based programs and Cooperative Research Centres. Grant programs change frequently, so contact us for current programs relevant to your business.
We see eligible work right across the industries we support, and each has its own page in our industries directory.
SaaS development, AI and machine learning, cybersecurity, cloud infrastructure, mobile and web applications.
Product design, process automation, materials testing, advanced manufacturing and quality control innovation.
Precision agriculture, crop science, sustainable farming, livestock management and agricultural IoT systems.
New construction methods, energy efficiency, BIM innovation, prefabrication and structural engineering R&D.
Medical device development, clinical software, diagnostic tools, telehealth and health data analytics.
Product formulation, food safety innovation, packaging R&D, extraction technology and mine automation.
The R&D Tax Incentive is subject to review by both AusIndustry and the ATO, and in recent years the ATO has increased its focus on claims, particularly in software development and professional services. Claims must demonstrate genuine experimental activity with technical uncertainty, a systematic progression from hypothesis to experiment and evaluation, contemporaneous documentation created at or near the time of the R&D, and appropriate expenditure allocation between R&D and non-R&D activities.
Claims are built to stand up to ATO and AusIndustry review from the outset, not defended after the fact.
Documentation frameworks follow current ATO best practice guidelines.
Expenditure methodologies are conservative and well-evidenced, reducing the risk of adverse findings, clawbacks or penalties.
We prepare clients for potential review from day one, which protects the claim and the company behind it.
We charge a fixed fee for R&D advisory and claim preparation. We do not charge a percentage of your refund or offset, and that distinction matters. The ATO has publicly identified contingency-fee arrangements as a compliance risk factor, and in its 2025-26 compliance priorities it specifically flags advisers who charge on a contingency basis as attracting increased scrutiny, noting such arrangements can indicate a refund claim is at higher risk of being incorrect.
Our fee is the same whether your eligible expenditure is $200,000 or $2 million.
We focus on building a defensible claim that withstands ATO and AusIndustry review.
You know what you are paying before we begin, not after you receive your offset.
Fixed-fee claims are less likely to attract ATO review than contingency-based claims.
The Federal Court has imposed penalties exceeding $36 million across recent promoter penalty cases involving inflated R&D claims, and in every case the taxpayer, not just the adviser, was liable for the shortfall, penalties and interest. As Chartered Accountants Australia and New Zealand members, we are bound by professional standards that prioritise accuracy and compliance over commercial incentives. For more, read our guide on how to choose an R&D Tax Incentive adviser.
Backed by Prime Partners, your R&D claim integrates with your broader tax strategy rather than being prepared in isolation by a standalone R&D firm. Our team works across both.
Our consultants understand both the AusIndustry eligibility criteria and the commercial realities of running an innovative business.
From eligibility assessment through to ATO lodgement and review defence, with no handoffs and no gaps between R&D advisers and your accountant.
Not sure if your activities qualify? We can assess your eligibility and give you an indication of the potential benefit.
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