Claiming the R&D Tax Incentive for work conducted outside Australia is possible only if you first obtain a Positive Overseas Finding from AusIndustry. This process is strict and requires strong evidence that your overseas activities are essential and cannot be conducted solely in Australia.
All four conditions for R&D Activities conducted outside of Australia must be met.
1. The overseas activity must be an R&D activity for the purposes of the R&DTI.
The overseas activity must meet the R&DTI’s requirements for being either a core R&D activity or a supporting R&D activity
2. There must be an Australian core R&D activity that cannot be completed without conducting the overseas R&D activity
Your overseas finding application needs to show that:
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there is at least one core R&D activity conducted, or to be conducted, solely in Australia (the Australian core activity); and
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you cannot complete the Australian core activity without conducting the overseas R&D activity.
3. The overseas activity cannot be conducted solely in Australia.
You must show that the overseas activity cannot be conducted solely in Australia. There are 4 allowable reasons for this:
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conducting the activity requires access to a facility, expertise or equipment not available in Australia
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conducting the activity would contravene laws relating to quarantine
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conducting the activity requires access to a population (of living things) not available in Australia
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conducting the activity requires access to geographical or geological features not available in Australia.
Your overseas finding application must provide evidence that shows you made reasonable efforts to obtain or gain access to the required resource within Australia.
Note financial reasons alone are not sufficient to meet this condition.
4. Expenditure on overseas R&D activities must be less than the expenditure on the related core and supporting R&D activities conducted solely in Australia.
Your overseas finding application needs to show the total actual and projected expenditure of related Australian and overseas activities. The total cost of the overseas activities must be less than the related Australian activities.