Skip to main content

      Innovating is hard. Especially when funds are tight.

      KPMG’s R&D Incentives and Grants team helps businesses of all shapes and sizes find funding for their innovation and growth plans, enabling short- and long-term success.

      Organisations that invest in innovation, including research and development (R&D), can create returns for their business with measurable impact and lasting value, while also delivering a competitive advantage for the Australian economy. 

      KPMG’s R&D Incentives and Grants team has strong experience in helping organisations access support through tax incentives, grants, and other funding sources. We can work closely with you to develop an enhanced innovation and growth program that leverages government support.

      Incentives and grants for innovation

      In the competitive world of manufacturing, business owners and executives are often frustrated by the speed of commercialising ideas. KPMG has a shared entrepreneurial mindset, and we use a practical and commercial approach, working with your business to help accelerate growth through finding immediate value and long-term gains.

      Our team has worked within manufacturing and research organisations for many years and use their extensive experience, research and insights to develop methods and tools to simplify commercialising an idea.

      Build it bigger, better, faster

      The faster you can develop and commercialise your ideas and bring them to market, the greater your competitive advantage and the more likely you are to be successful and grow your business and market. Equally important is how you recognise, value and protect your intellectual property (IP). 

      We can help you

      • Increase the pace of innovation

        by growing your innovation capacity and improving performance

      • Stay aligned and solutions focused
      • Identify collaborative research opportunities

        with universities and research service providers

      • Develop your innovation and IP strategy

        boosting innovation and accelerating your organisation’s efforts to grow towards the future.

      Government incentives

      KPMG’s R&D Incentives and Grants team specialises in helping organisations across industries 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% on the eligible R&D spend, through to an 8.5% tax credit, where the business is large and its R&D spend is low. 

      We can help you understand and access this support

      Incentives for technology-based improvements to processes, products and services are often overlooked, as they occur outside traditional product development or R&D departments.

      We can help you

      KPMG can assist with strategic 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% refundable tax offset for qualifying Australian development expenditure.

      • 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.

      • Critical Minerals Production Tax Incentive

        as proposed, will provide a refundable tax incentive of 10% 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.

      Industry incentives

      R&D incentives for agribusiness

      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.

      • Make sure 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.
      Download factsheet

      KPMG R&D Incentives and Grants Factsheet - Agribusiness

      R&D Incentives and Grants Service Factsheet
      Download factsheet

      R&D incentives for 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 Industry Innovation and Science Australia (IISA). 

      You must justify 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 understanding the implications of the interaction between the two: for example, to understand whether a clawback adjustment is required.

      R&D incentives for energy and low emission technology

      It can be difficult to determine the extent of the eligible R&D activities in development and production environments. Where does the R&D end and business as usual begin?

      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.

      Download factsheet

      KPMG R&D Incentives and Grants Factsheet - Energy and low emissions technology (LET)

      R&D Incentives and Grants Service Factsheet
      Download factsheet

      R&D incentives for engineering and manufacturing

      Ask yourself 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.

      During a production trial or site-based testing, consider how you will identify when the R&D is complete.

      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.

      Download factsheet

      KPMG R&D Incentives and Grants Factsheet - Manufacturing

      R&D Incentives and Grants Service Factsheet
      Download factsheet

      R&D incentives for resources and critical minerals

      It can be difficult to determine the extent of the eligible R&D activities in development and production environments. Where does the R&D end and business as usual begin?

      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.

      Download factsheet

      KPMG R&D Incentives and Grants Factsheet - Resources and critical minerals

      R&D Incentives and Grants Service Factsheet
      Download factsheet

      R&D incentives for startups

       A lean company structure and rapid prototyping means you might not be focused 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:

      • Do your record-keeping practices meet the requirements? 
      • Are you and your team are up to date on the latest guidance? 
      • Do you need help with understanding the details of the program?
      • 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.

      R&D incentives for 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 can lead to keeping 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.

      Download factsheet

      KPMG R&D Incentives and Grants Factsheet - Technology

      R&D Incentives and Grants Service Factsheet
      Download factsheet

      Why choose KPMG

      KPMG's R&D Incentives and Grants team offers four strategic advantages.

      factory

      Industry understanding

      With deep industry understanding, our team has decades of collective and lived industry experience. We can help you prepare responses and secure funding from Australia’s most valuable incentive programs.

      psychology

      Specialist knowledge

      Our team features specialists with diverse technical knowledge and qualifications. It includes engineers, scientists, IT specialists, lawyers and accountants who understand your business and its competitive position. 

      3p

      Regulator engagement

      We stay ahead of evolving regulations. Our regular contact with policymakers and program administrators keeps us at the forefront of the latest guidance and requirements, allowing us to provide valuable industry feedback so your R&D strategy can remain future-ready and compliant.

      public

      KPMG’s local and global network

      Access our local capabilities such as financial modelling, tax structuring, government relations or even our high growth venture team. In addition, our global network means we can help you, wherever you are and wherever you want to go. 

      Insights

      Browse KPMG's insights and thought leadership below.

      Something went wrong

      Oops!! Something went wrong, please try again

      Mid-Market & Private Business Advisory

      Dedicated to supporting Australia’s emerging, private, family and mid-market organisations with tailored advisory, tax, and assurance services.
      View services
      Starry night sky ahead of an empty road, signifying moving forward to infinite possibilities

      Meet the team

      FAQs

      The Research and Development (R&D) Tax Incentive is an Australian Government program that provides tax offsets to encourage companies to undertake R&D activities that might otherwise be too costly or risky. This could include:

      • refundable tax offsets for eligible R&D expenditure
      • support to innovate and develop new products, processes, or services
      • help to reduce the financial burden of investing in an innovation. 

      Eligible activities generally include:

      • Core R&D activities: experimental work conducted for the purpose of generating new knowledge.
      • Supporting activities: tasks directly related to core R&D, such as design, testing, and analysis. For example, developing new software or technology, improving manufacturing processes, or creating new materials or products.
      • Activities must meet the legislative definition of R&D and be systematic, hypothesis-driven, and experimental.

      KPMG can assist by:

      • identifying eligible R&D activities and costs
      • preparing and lodging R&D tax incentive applications
      • advising on documentation and compliance
      • providing strategic guidance to align innovation projects with incentive criteria
      • helping businesses access government grants alongside tax incentives. 

      Yes, government innovation grants are available for private enterprises in Australia. Thes grants are designed to encourage innovation, research, and commercialisation across various sectors. Examples include:

      • Accelerating Commercialisation Grant – helps businesses bring new products, processes, or services to market.
      • Industry growth program – supports SMEs developing innovative solutions.
      • Clean energy and sustainability grants – for projects focused on renewable energy and emissions reduction.
      • Digital transformation grants – for technology adoption and innovation.

      These grants often complement the R&D Tax Incentive, but unlike tax offsets, grants provide direct funding (sometimes up-front or milestone-based) and are usually competitive.

      R&D tax incentives are a tax offset claimed through your company tax return for eligible R&D expenditure.

      Innovation grants are direct funding provided up-front or through milestone payments for specific projects. Grants are competitive and application-based, while tax incentives are entitlement-based if eligibility criteria are met. 

      KPMG provides:

      • audit-ready documentation support
      • guidance on AusIndustry and ATO compliance requirements
      • assistance with reporting obligations and responding to regulator reviews
      • strategies to reduce compliance risk and maintain integrity of claims. 

      Generally, technology implementation costs alone do not qualify unless they are part of an eligible R&D activity (e.g. experimental development of new technology). Routine implementation or configuration is excluded. KPMG helps assess which costs meet the criteria.

      Industries that typically benefit include:

      • technology and software development
      • manufacturing and engineering
      • health and life sciences
      • agriculture and food production
      • energy and cleantech.

      While not exclusive to these sectors, they often have high innovation costs and strong eligibility for incentives. 

      Get in touch

      If you would like to know more about KPMG’s R&D Incentives and Grants services, please enter your details in the form and a KPMG team member will contact you to discuss your enquiry further.