Company Profile

Company: Moodle

Sector: Professional, Scientific and Technical Services

Location: Western Australia

Profile: Moodle is a technology company that develops open-source online learning software.

R&D Tax incentive critical for online learning developer Moodle

The COVID pandemic has accelerated the shift to online learning, presenting both challenges and opportunities for market-leading online learning company Moodle.
Support from the Australian Government, through the Research and Development Tax Incentive (R&D Tax Incentive), has been critical in helping the company maintain its innovative edge and keep ahead of competitors.

AusIndustry’s new ‘Software-related activities and the R&D Tax Incentive’ guidance builds on the support given to companies like Moodle, providing them with additional certainty in registering their R&D activities for the Incentive. It provides software-specific examples of how to self-assess whether their activities are eligible for the incentive.

This will enable more companies conducting software-related R&D activities to compete on a global scale like Moodle. AusIndustry is planning to release further modules jointly with the Australian Taxation Office to provide companies with additional guidance on expenditure and record-keeping. Other modules will contain case studies and additional examples of the types of software-related activities that will meet the requirements for the R&D Tax Incentive.

Moodle founder and CEO Martin Dougiamas says the pandemic has produced a fundamental shift in the way businesses conduct their work and the way the world thinks about education.

“Moodle’s been doing this for 20 years, but it feels like the rest of the world just caught up with the idea. We're now going head-to-head with the Googles and Microsofts of the world, and we need all the help we can get,” he adds.

Moodle is a global business. Its products are used by universities and schools as well as other large public and private institutions, including Britain’s National Health Service and the United States Air Force.

But Moodle is a very different type of business to competitors like Microsoft and Google.

“We're an open-source software company,” says Martin. “This means our software is free and available, and it's used all over the world. About two thirds of the world's universities use Moodle as their online learning platform.”

“Educational institutions need online learning and they're also prepared to work together on it. We are the glue that helps teachers and students from different institutions work together,” he explains.

Moodle employs about 150 people, 40 of them in Australia and the rest around the globe. It continually develops new online learning ideas and the software to turn those ideas into reality.

Research and innovation are the core of Moodle’s business. When Chief Financial Officer Rohan Hardie joined the team, he set about making sure Moodle was conducting research and development that was eligible for the R&D Tax Incentive.

“Since 2016 we've been lodging claims every year. It has allowed us to hire more developers and continue with the R&D in a stronger fashion,” he says.

We're very grateful for the support through the AusIndustry R&D Tax Incentive program. It feels like Australia's ‘got our back’.
— Martin Dougiamas, Founder and CEO, Moodle

Offshore research

Rohan says AusIndustry has helped the company to understand the R&D Tax Incentive approval process, which has been particularly important because much of its research comes from overseas.

“We had a product we were developing in the UK and Europe, where the technology and expertise wasn’t available in Australia. AusIndustry helped us understand how we could get an ‘advance overseas finding’, which gave us certainty that the R&D we were doing offshore could be claimed through the Australian business,” he says.

A positive advance overseas finding is essentially a pre-approval. It allows Moodle to spend money on overseas R&D knowing it can claim the tax offset later under the R&D Tax Incentive.

“We had a meeting with AusIndustry to understand the process, and an external provider helped too, but it was more of a partnership along with AusIndustry. Ultimately, we qualified for the tax incentive in 2020,” says Rohan.

“We're very grateful for the support through the AusIndustry R&D Tax Incentive program. It feels like Australia's ‘got our back’,” Martin says.

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