The Australian Taxation Office (ATO) has published updated guidance concerning the rate of the Research and Development (R&D) tax offset and whether it is refundable under the R&D tax incentive.

If aggregated turnover is less than AUD 20 million and it is not controlled by an exempt entity, then 43.5% refundable tax offset may be claimed. If aggregated turnover is $20 million or more and controlled by exempt entities, then it can be claimed the non-refundable 38.5% tax offset.

The rate of the R&D tax offset is reduced to the company tax rate for that portion of an entity’s notional R&D deductions that exceed $100 million for an income year (applicable to income years starting on or after 1 July 2014 and before 1 July 2024).