Hi AlphaAngle,
I'm not an expert by any means but my impression was if a company meets certain conditions they can apply for R&D tax rebates or government grants. Below is some information I've found that explains it pretty well.
According to Australian Gov
Companies with an aggregated turnover of <$20M may receive a refundable R&D offset rate equal to their corporate tax rate + an 18.5% premium
Companies with an aggregated turnover of $20M or more - R&D up to 2% of expenditures = company tax rate + 8.5% premium, additional R&D company tax rate + 16.5% premium
Do you Know the Difference Between Govt Grants vs the RD Tax Incentive?
“There are roughly 700 business grants offered by the three tiers of government in Australia. Do you know which ones apply to you?”
“This is a scheme overseen by AusIndustry in conjunction with the ATO and, for every dollar spent on eligible research and development activities, companies receive a 40c or 45c tax offset.
If you record a loss and your turnover is less than $20 million, that offset is available in cash.”
First, for ongoing research and development, use the R&D Tax Incentive. Don’t throw away your own money by failing to register and claim.
Second, be open to grant opportunities, particularly the AC grants. We point clients to the Grant Finder website where you can search a range of categories. Part of the skill is getting quickly to a point where you know that it’s not for you.”
https://mjassociates.com.au/journalpost/do-you-know-the-difference-govt-grants-vs-the-rd-tax-incentive/
How the RDTI Has Helped Other Companies
“Being a start-up, [the RDTI] has been critical for our company because, while we are listed, because we are not out in the market and selling a product yet, it is very difficult to get funding.” – Georgina Carpendale CFO MX1
Since the inception of Micro-X in 2012, the organisation has applied for the RDTI, which forms about 20% of their total funding. Research and development takes up 90% of Micro-X’s budget.
Needing such a high level of investment, the RDTI has enabled the company not to need to always be reliant on external investment.
“We’ve probably grown quicker than we planned, without the money coming through [from the RDTI] we wouldn’t have been up to the 23 employees,” she says.”
“In regards to equipment, the RDTI has assisted Micro X in purchasing equipment to develop and manufacture novel and innovative carbon nano-tube technology products.”
“Especially for the Australian economy there are companies here that have ground-breaking technology and without the R&D Tax Incentive it would have been very, very difficult to bring it to market and [the question of] whether we would even be able to do it in Australia or not.” – Georgina Carpendale CFO MX1
https://business.gov.au/grants-and-programs/research-and-development-tax-incentive/how-the-rdti-has-helped-other-companies/microx-limited
Other links
https://business.gov.au/grants-and-programs/research-and-development-tax-incentive
The R&D Tax Incentive Insights Podcasts
https://business.gov.au/grants-and-programs/research-and-development-tax-incentive/the-rd-tax-incentive-insights-podcasts
Case study of Micro-X (ASX:Mx1)
https://business.gov.au/grants-and-programs/research-and-development-tax-incentive/how-the-rdti-has-helped-other-companies/microx-limited
Info on government grants for innovation:
https://www.business.qld.gov.au/running-business/growing-business/becoming-innovative/innovation-grants-support/grants
If you Google "RDTI At a Glance PDF" there's a 2 page document giving you a general overview.
Thanks for the topic, it's added a new podcast to my rotation.