The support your business needs to innovate and grow.
KPMG’s Accelerating Business Growth team specialises in helping industry understand and access government incentives.
For instance the R&D Tax Incentive is the government’s principal program to support businesses to invest in R&D. It provides R&D tax offsets over and above the applicable tax rate where the amount you receive depends on a range of factors (e.g. entity type, ownership and turnover, level and location of R&D being undertaken, etc.). As a result, the benefit could be as much as a cash refund of 43.5 percent on the eligible R&D spend through to an 8.5 percent tax credit where the business is large, and its R&D spend is low. We can help you understand and access this support, including for technology-based improvements to processes, products and services that are often overlooked as they occur outside traditional product development or R&D departments.
Additionally KPMG can assist with advice and support in planning and applying for each of the following tax incentives:
- Digital Games Tax Offset – from 1 July 2022, provides eligible games developers with a 30 percent refundable tax offset for qualifying Australian development expenditure.
- The Hydrogen Production Tax Incentive – as proposed, will provide a AU$2 per kilogram refundable tax offset, for renewable hydrogen produced for up to 10 years per project, between 1 July 2027 and 30 June 2040.
- The Critical Minerals Production Tax Incentive – as proposed, will provide a refundable tax incentive of 10 percent of relevant processing and refining costs for Australia’s 31 critical minerals for up to 10 years per project between 1 July 2027 and 30 June 2040.
Unlock growth
Review your current and historic R&D claims to assess eligibility and alignment with legislative requirements.
Assist in the submission of advance or overseas findings to give your business greater certainty of the future eligibility of activities and expenditure.
Understand how different tax incentives and grants interact with each other to ensure you are optimising all available government incentives.
R&D Tax Premium Calculator
- FY 2022
Enter details of FY 2022
Aggregated turnover
R&D expenditure
Company operation expenses are not required as input if Aggregated turnover is less than $20m.
Company operating expenses
- FY 2023
Enter details of FY 2023
Aggregated turnover
R&D expenditure
Company operation expenses are not required as input if Aggregated turnover is less than $20m.Company operating expenses
- FY 2024
Enter details of FY 2024
Aggregated turnover
R&D expenditure
Company operation expenses are not required as input if Aggregated turnover is less than $20m.Company operating expenses
- FY22
- FY23
- FY24
FY22 permanent benefit: $185,000 at 18.5%
Total R&D expenditure
$1,000,000Refundable tax offset
$435,000 at 43.5%Base premium
$185,000 at 18.5%Intensity premium
$0 at 0%
- FY22
- FY23
- FY24
FY22 permanent benefit rate: 18.5%
Corporate tax rate
25%Base premium
$185,000 at 18.5%Intensity premium
$0 at 0%
* This calculator is based on the law as of June 2021 and any estimates above are based on the limited information that you have provided. It should not be relied upon as a true representation of any actual tax offsets or final outcomes, which will be based on your specific circumstances and ultimately will be determined by the Australian Taxation Office and AusIndustry, a division of Industry Innovation and Science Australia. To the extent permitted by law, no liability is accepted by KPMG, it’s affiliated entities, partners, officers and employees for any loss or damage arising, directly or indirectly from your use of this calculator.
Considerations for your industry and the R&D Tax Incentive
Our team has extensive industry experience and diverse technical backgrounds such as science, information technology, engineering, law, taxation and accounting. We work shoulder to shoulder with you to understand the programs and to identify eligible activities while helping you to meet the regulatory compliance obligations. This is achieved through a real-time approach to claims – a bespoke process tailored to how your business works and designed to better track and collate R&D information as you conduct your R&D activities.
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Agriculture and Food
Are you maintaining adequate documentation to support the eligibility of your R&D trials? You often can't solely rely on existing production or operational systems to substantiate R&D intentions or the experimental nature of your activities.
Ensure you are correctly applying the feedstock provisions to your unique situation. Consider if an adjustment should be made when crops, livestock, or materials are processed into products for sale during the course of R&D activities.
Consider what an appropriate sample size for your R&D project should be and ensure there is a link between registered activities and the associated expenditure claimed.
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Information Technology
Consider the distinction between the different aspects of the project (new development vs customisation vs configuration) and how different types of activities undertaken as part of your project are assessed against the R&D eligibility requirements.
Consider how you can use existing development tools to better identify and document your R&D activities. Agile development and record keeping practices are great at reducing administrative overheads, but mean companies tend to keep less project documentation.
Consider the internal business administration rule, specific to software and IT claims, which prevents companies from claiming the R&D Tax Incentive on activities that fall within this exclusion.
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Biotech, Medtech and Pharmaceutical
Consider that costs associated with the protection of IP are not typically eligible R&D expenditure.
You may be able to claim R&D expenditure on R&D activities conducted overseas but only after your application for Advance/Overseas Findings of eligible overseas activities has been approved by Innovation and Science Australia. You must justify the reason why the R&D activities cannot be conducted in Australia and this typically means demonstrating a lack of expertise, facilities or equipment in Australia but can also include specific populations overseas required for certain clinical trials.
The R&D Tax Incentive can provide a refundable tax offset even when you have also received support in the form of specific government grant funding. However, it's worthwhile to understand the implications of the interaction between the funding, for example to understand whether a clawback adjustment is required.
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Engineering and Manufacturing
Consider how core R&D activities are distinguished from routine engineering processes, and how well these differences are documented? It is important that you can substantiate the iterative and experimental nature of R&D activities with contemporaneous documentation.
Consider how you will identify when R&D is completed during a production trial or site-based testing.
If your R&D is directly or indirectly related to the production of goods or services, consider how this may impact on the eligibility of activities. You may need to consider the impacts of the 'dominant purpose' test in these circumstances and potential feedstock adjustments.
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Energy and Natural Resources
It can be difficult to determine the extent of the eligible R&D activities in development and production environments – where the R&D ends and business as usual begins?
The specific exclusion for exploration-type activities should be considered when undertaking R&D in a mining or prospecting context.
Depreciation can form a large portion of R&D expenditure where heavy plant and equipment is involved. By developing a system for apportionment and adjustment of tax asset registers where required, these costs can be captured in a simple and traceable way.
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Startups
A lean company structure and rapid prototyping means you might not be focussed on preparing contemporaneous documentation or recording changes to your hypothesis or experimental outcomes. Consider how you and your team can use existing tools to document your R&D activities to ensure you claim every eligible dollar you can.
As you move through Seed, Series A and Series B growth stages, investors will want confidence that you have a robust R&D Tax Incentive structure and claim process in place. Consider whether your record keeping practices meet the requirements and whether you and your team are up to date on the latest guidance. Do you need help with understanding the details of the program and are you confident your team understand the R&D criteria and level of documentation expected?
We can also assist you with understanding how and when investor tax incentives might help you raise more capital faster.
Grants and Incentives
As a growing business, you recognise how invaluable non-dilutive funding can be to help you get to that next stage of your business’ best future. The Australian federal and state governments offer a range of targeted incentives to help you get there, and KPMG’s Accelerating Business Growth team is experienced at enhancing your chances of a successful application to these incentives. We have assisted many businesses in accessing government funding to achieve stronger and quicker growth for the future. We can also assist in negotiating discretionary funding opportunities, identifying sources of industry funding or accessing other forms of government funding.
Seeking grants and incentives
Business activities resulting in job creation, adoption of advanced manufacturing processes and exports and import replacement, will be highly regarded as the nation seeks to rebuild the economy following COVID-19 and help to enhance its sovereign capability.
However, accessing government incentives can be challenging, time consuming and highly competitive. Programs can also change rapidly and the identification of key opportunities that are strategically aligned to a business requires knowledge of how to access the information, time to research your company’s competitive advantage and then prepare a detailed response. A strong application is vital to success in securing grants.
Finding success
We are experienced in assisting with the identification and the securing of government incentives and liaising with federal and state government agencies to improve the chances of success for you. Our historic performance across key grant programs demonstrates that our clients have been many times more likely to be successful with our support. We have supported all types of businesses from early-stage high growth businesses through to multi-national corporations in many different industry sectors.
We can help with all aspects of accelerating your business growth, from locating the best opportunities for your business, to innovation advisory services, to identifying and accessing sources of government funding (whether via tax incentives, grants or other). KPMG’s broad network of specialists enables us to directly engage with government bodies and treasury departments to access non-traditional funding opportunities as well.
Meet the team
Our team can help with all aspects, from locating the best opportunities for your company, to submission advisory services, to helping you understand how best to target your responses, to fully outsourced application preparation. KPMG’s broad network of experts enables us to directly engage with government bodies and treasury departments to access non-traditional funding opportunities as well.
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