Conducting R&D activities outside Australia

To register and claim a tax offset for activities conducted overseas you must first apply for an Overseas Finding. To receive an Overseas Finding for an overseas R&D activity you must demonstrate that it meets the following 4 conditions.

1. Your overseas R&D activity must be an R&D activity

The overseas activity must meet the R&D Tax Incentive program’s requirements for being either a core R&D activity or a supporting R&D activity.

2. There must be a scientific link to an Australian core R&D activity

You need to show that:

  • there is a link between your planned overseas activity and your eligible Australian core R&D activity
  • you can’t complete the Australian core R&D activity without conducting the overseas activity.

3. The overseas R&D activity must not be able to be conducted in Australia or its external Territories

You must demonstrate why the activity can’t be solely conducted in Australia. There are 4 allowable reasons.

The activity:

  • requires facilities, expertise or equipment which are not available in Australia
  • would contravene a law relating to quarantine
  • requires a population (of living things) which are not available in Australia
  • requires access to geographical or geological features that are not available in Australia

Financial reasons alone are insufficient for an overseas activity to meet this condition.

4. The costs of overseas R&D activities must be less than the costs of related R&D activities undertaken solely in Australia

If the anticipated expenditure for your overseas R&D activities is greater than the anticipated expenditure on the related Australian R&D activities we'll not find them eligible.

You'll need to include what you reasonably anticipate the expenditure will be in all income years, when you apply for an Overseas Finding.

What does 'not available in Australia' mean

Overseas Findings

An Overseas Finding also includes an Advance Finding about whether your overseas activities are ‘R&D activities’. This will give you certainty about the eligibility of your overseas activities. An Advance Finding is a binding decision issued by us.

In your application for an Overseas Finding you'll need to include information about each overseas activity and show how each activity meets the 4 conditions above. Following a review of your application we'll contact you with our finding(s).

You must submit your application for an Overseas Finding before the end of the income year in which you conduct, or plan to conduct, the activity. We cannot accept late applications or grant extensions of time to apply for a finding under any circumstances.

Even if you have a positive Overseas Finding, you'll still need to apply to register your R&D activities. An Overseas Finding is not a substitute for registering your R&D activities.

The finding process

When you apply, we will review the information you provide and work with you to understand your activities. We will then assess whether your activities meet the conditions for overseas R&D activities that cannot be conducted in Australia.

We may conduct background research to verify your information and contact you for more information to make a decision.

You should keep records of how:

  • you self-assessed your activities
  • your activities meet the conditions for being overseas R&D activities that cannot be conducted in Australia.

There are 4 possible findings we can make about your activities:

  • all of your activities are eligible and meet the conditions
  • your activities do not meet all of the conditions and are ineligible
  • some or part of your activities are eligible
  • we refuse to make a finding.

In each of these instances, we'll provide you with written notice of our decision, which includes a finding certificate about your activities. A copy of this notice and any certificates will also be provided to the Australian Tax Office (ATO).

A notice or certificate of finding is not a registration. If you get a positive Overseas Finding you'll still need apply to register your R&D activities.

The department has engaged independent contractors who may assist in assessing your overseas finding application. Your information remains secure and confidential. The department will make the final decision.

How long Overseas Findings last

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Find out how to submit an application for an Overseas Finding.