Research Connections
Research Connections is part of the Entrepreneurs’ Programme (EP).
It aims to help small and medium businesses to become more competitive by working with the research sector to develop new ideas with commercial potential, as well as to help identify any knowledge gaps that are preventing business growth.
Facilitated service
Research Connections is a free one-on-one facilitated service and may include the opportunity to apply for a grant.
Following an initial business research needs assessment you will be matched with a Facilitator who will work with your business to:
• identify business opportunities (i.e. technology, information technology, testing and prototyping facilities, new market opportunities, advanced materials);
• identify critical research areas for improvement (products, processes and/or services);
• identify strategic research opportunities into new or existing markets;
• find the best source of expertise, suppliers of technology and technical knowledge advice;
• find ways to work with the research sector; and/or
• improve access to Science, Technology, Engineering and Mathematics (STEM) expertise, including by promoting research organisations’ work integrated learning initiatives.
Grant
After completing the facilitated service, your Facilitator may also work with you to apply for 2 to 12 months of financial assistance (a matched grant worth up to $50,000 paid in arrears). The grant will support:
> engagement of a Publicly Funded Research Organisation to undertake research activities for your business;
> the placement of a researcher in your business to develop and implement a new idea with commercial potential;
> access to research infrastructure; and/or
> access to other forms of research tools and expertise, based on the research needs of your business.
A business may apply for a second Research Connections grant. Applications will be accepted within six weeks of (either before or after) the completion of the first granting period. Applicants will need to work with a Facilitator and undergo a further business research needs assessment before a second grant is approved. The project must commence within three months of the application for the second grant being approved.
A business may only receive a maximum of two Research Connections grants.
Eligibility
To apply for Research Connections, your business must meet all of the following criteria. Must be operating in one of the following industry sectors:
a. Advanced Manufacturing;
b. Food and Agribusiness;
c. Medical Technology and Pharmaceuticals;
d. Mining Equipment, Technology and Services;
e. Oil, Gas and Energy; or
f. Enabling technologies and services of the sectors listed in a – e above;
Also must be either:
a. An Australian business or corporation which trades, or is looking to trade, overseas or in more than one Australian state;
b. A Financial Corporation that has already been incorporated within Australia. Financial activities include activities such as borrowing or lending money.
c. A Trading Corporation that has already been incorporated in Australia whose trading activities make up a substantial or significant portion of their overall activities. Trading activities include the buying and selling of goods and services.
d. A foreign corporation (noting such companies must be registered with ASIC under Part 5B.2 of the Corporations Act to carry out business in Australia);
A sole trader, a non-tax exempt corporation or a trust is not eligible in its own right as it is not a legal entity. However, a corporate trustee (a company with an ACN) can apply on behalf of a trust if the trustee meets all other eligibility criteria.
Other Essentials
> have turnover or expenditure between $1.5 million to $100 million, or between $750,000 and $100 million for applicants from Remote Australia;
> be solvent (this means your business can pay all its debts when they are due);
> have operated in Australia and filed Business Activity Statements showing ongoing trading in at least three full consecutive years; and
> comply with its obligations under the Workplace Gender Equality Act 2012 (Cth).
Research and Development Tax Incentive
The Research and development (R&D) tax incentive is designed to encourage more companies to engage in R&D.
The R&D tax incentive aims to boost competitiveness and improve productivity across the Australian economy by:
> encouraging industry to conduct R&D that may not otherwise have been conducted
> improving the incentive for smaller firms to undertake R&D.
> providing business with more predictable, less complex support
Entities engaged in R&D may be eligible for:
> a 45% refundable tax offset for eligible entities with an aggregated turnover of less than $20 million per annum, provided they are not controlled by income tax exempt entities
> a 40% non-refundable tax offset for all other eligible entities (entities may be able to carry forward unused offset amounts to future income years).
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.
Eligibility
> You assess for yourself whether or not your entity is eligible to register R&D activities and claim R&D tax offsets in any given year.
Broadly speaking, your eligibility to claim R&D tax offsets will depend on whether or not you are an R&D entity and, if you are, whether or not you have incurred notional deductions of at least $20,000 on eligible R&D activities.
>You can only claim an R&D tax offset if you are an R&D entity. You are an R&D entity if you are a corporation that is any of the following:
> incorporated under an Australian law
> incorporated under a foreign law but an Australian resident for income tax purposes
> incorporated under a foreign law and you are both
> a resident of a country with which Australia has a double tax agreement that includes a definition of 'permanent establishment'; and
> carrying on business in Australia through a permanent establishment as defined in the double tax agreement.
>Your eligibility to claim the R&D tax offset will also depend on where you are conducting your R&D activities and, importantly, what those activities are.
Generally, only R&D activities conducted in Australia qualify for the R&D tax incentive. However, R&D activities conducted overseas also qualify if Innovation Australia makes a finding that your activities meet specific requirements.
> Your research and development activities must meet certain criteria to be eligible for the R&D tax incentive: they must be classified as either core R&D activities or supporting R&D activities.
> Core R&D activities are experimental activities:
> whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience, but can only be determined by applying a systematic progression of work that
> is based on principles of established science; and
> proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions
> that are conducted for the purpose of generating new knowledge (including about creating new knowledge or improved materials, products, devices, processes or services).
> Some types of activities are specifically excluded from being core R&D activities.
> A supporting activity is one that is directly related to core R&D activities or, for certain activities, has been undertaken for the dominant purpose of supporting core R&D activities. Activities that must satisfy the dominant purpose requirement are those that produce - or are directly related to producing - goods or services; or are excluded from being core R&D activities.
The ATO and AusIndustry (on behalf of Innovation Australia) jointly administer the R&D tax incentive. All R&D activities must be registered with AusIndustry before the tax offset is claimed.
