Transparency in focus for R&D tax incentive
Australian Taxation Office
The ATO has published its annual R&D tax incentive transparency report.
The Australian Taxation Office (ATO) has published its annual Research and Development tax incentive (R&DTI) transparency report, revealing almost $17 billion was invested in qualifying research and development by companies in 2023–24.
The report contains data on over 13,400 companies that claimed the tax incentive for R&D expenditure for the 2023–24 income year, comprised of 51% of small businesses, 31% of privately owned and wealthy groups, and 18% of Public and multinational groups reporting R&D expenditure.
ATO Deputy Commissioner Louise Clarke said the report is not only a legislative requirement by the Government, it also improves public accountability for R&D claimants and encourages voluntary compliance with the program.
‘Transparency helps build confidence in the R&D tax incentive by showing the community where public support is being directed, while encouraging businesses to take care and ensure their claims are accurate,’ Ms Clarke said.
The ATO has sophisticated systems in place to identify non-compliance with the R&DTI program and undertakes reviews and audits to verify R&D claims.
‘The ATO is committed to upholding the integrity of the program so that businesses can continue to access the multitude of benefits that comes with undertaking innovative research,’ Ms Clarke said.
‘In line with our general compliance approach for the tax and superannuation systems, we protect the integrity of the program by making it easy for those who comply and harder for those who seek to cheat the system.’
The R&D tax incentive plays a critical role in driving productivity and economic growth by supporting businesses to undertake innovative R&D activities that may not otherwise be viable.
‘We’re seeing strong, stable engagement from businesses across all industries, with new and returning entrants driving modest growth in participation and R&D expenditure – a reflection of the value in supporting investment in R&D.’
The R&DTI program is a self-assessment and self-registration program jointly administered by the ATO and Department of Industry, Science and Resources (DISR).
Key data points in 2023–24 report
The ATO is required by law to publish data about Research and Development (R&D) tax incentive claims. This R&D report covers 13,490 entities for the 2023–24 income year, of which:
- 6,920 are small business entities with an annual turnover of less than $10 million
- 4,116 are privately owned and wealthy group entities with an annual turnover of more than $10 million, that are not publicly listed or foreign owned
- 2,449 are public and multinational entities that are publicly listed and multinational companies
- 5 are not-for-profit entities.
In 2023–24, public and multinational companies accounted for the largest share of R&D investment, investing $9 billion in R&D (54% of total R&D expenditure), followed by privately owned and wealthy groups at 28% of total R&D expenditure.
Small businesses recorded the largest growth, increasing their R&D expenditure by 28% to $3.1 billion.
Similar to prior years, the professional, scientific and technical services industry accounted for the highest R&D expenditure in 2023–24, followed by the manufacturing sector.
If a client has amended their expenditure, the data will include both the original amount claimed plus the amended amount. We will not publish adjustments made by the Commissioner.
Notes to journalists
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Research and Development Tax Incentive program charter (For additional Information about the role of ATO and DISR)
Contact details:
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