Conducting eligible overseas activities

You must confirm the eligibility of all overseas R&D activities before you can claim the tax offset. You do this through receiving an Overseas Finding that confirms that each overseas R&D activity meets the eligibility conditions.

For us to find an overseas R&D activity eligible it must meet each of the following 4 requirements.

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

The overseas activity must meet the R&D Tax Incentive definition of 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.
  • the overseas R&D activity must not be able to be conducted in Australia or its external Territories.

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 for 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 in all income years, when you apply for an Overseas Finding.

What does 'not available in Australia' mean

Overseas Findings

An Overseas Finding includes an Advance Finding on your overseas activities. It'll give you certainty about the eligibility of your overseas activities. The finding is a binding determination issued by us.

In your application for an Overseas Finding you'll need to include information on each overseas activity. You'll need to show how each activity meets the 4 eligibility requirements. Following a review of your application we'll contact you with our finding.

Even if you have a positive Overseas Finding, you'll still need to apply to register your R&D activities.

The finding process

When you apply, we will review the information you provide. We will work with you to understand your activities. We will then assess whether your activities meet the conditions for overseas R&D activities .

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

Once you've applied we'll assess the information you've provided. We'll determine if it demonstrates if your activities meet the definition of eligible core or supporting R&D activities.

Examples of information that you may provide to support eligibility include:

  • how you self-assessed your activities
  • records of how your experiments were planned, conducted and analysed can support eligibility.

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

  • Eligible
  • Ineligible
  • Partially eligible
  • We may refuse to make a finding

We'll provide you with a finding certificate for all instances, other than when we refuse to make a finding. The finding certificate will copied to the Australian Tax Office (ATO).

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

From June 2021, independent contractors may assist in assessing your overseas finding application. Your information remains secure and confidential. The department will make the final decision.

Overseas findings - How long does an overseas finding last

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