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  • Tim Kannegieter

Does your POC qualify for the R&D tax concession?

Updated: Dec 12, 2023

The R&D Tax Incentive (RDTI) offers a tax-offset of 18.5% above a company’s tax rate, making it one of the best ways possible to gain government support for your innovation, equivalent or better even than the matched grant opportunities available.


Many companies that could take advantage of this great incentive are not, due to ignorance or undue caution over eligibility due to recent crackdowns. However, the guidelines are clear and if your research involves experimentation where the “outcome cannot be known or determined in advance” and generates new knowledge about “products, devices, processes or services”, then you are eligible.


Proof of Concept (POC) projects are ideally situated to take advantage of the RDTI as, almost by definition, they involve proving elements of your product or service that you are not sure about – otherwise you would not need a POC.


What is even better is that the scheme allows you to claim “supporting R&D” activities, as long as they are directly related to the core R&D activity. This means that a lot of development work for your product that would normally be ineligible can be claimed as long as the work is “undertaken for the dominant purpose of supporting core R&D activities”.


The implications for your project development are clear - front end as much development work as you legally can to support your core research, thus reducing your costs later in the product development process. Once your POC project is complete, you will not be able to later claim those supporting activities.


So, in getting the most out of your POC, consider the nature of the proof points you choose. The more ambitious they are in terms of resolving problems where the outcome can’t be known in advance and truly innovating the product, process or service, then you are not only more likely to be commercially successful but the more likely you are to be able to claim the RDTI.


All that is needed is a careful reading of the guidance provided by the AusIndustry and to put in place the necessary documentation to comply with the requirements. At this point many companies ask themselves “is it worth the paper work?” Afterall, I just want to spend as little time and money on my POC as possible.


Genesys has encountered this situation many times and has developed templates for the plans and reports required, to make it easier for its clients to claim the RDTI. Our templates are structured to directly address all the key questions and requirements set out in the RDTI Guide to Interpretation. We have even pasted the relevant sections of the Guide into the header of each section to make it easy to understand why that section is there and to craft your content to directly address the requirements of the RDTI. In each section we provide examples of content that can be adapted to your project.


You can download the Genesys R&D Plan template for free right now our contact us to discuss how to best position your POC for the RDTI.


The RDTI won’t be for everyone, but for those with the ambition to deliver true innovation consider ensuring the scope of your POC includes unknown outcomes and the generation of new knowledge.



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