What is an Advance Finding?

An Advance Finding is a decision about the eligibility of R&D activities for the R&D Tax Incentive. A positive Advance Finding can cover R&D activities for up to three years. While eligible Australian R&D activities can be registered with or without an Advance Finding, any R&D activities conducted overseas must have an Advance Overseas Finding in place before an R&D Tax Offset for these activities can be claimed.

In order to register and claim the R&D Tax Offset for activities conducted overseas a company must first apply for an Overseas Finding.

The Overseas Finding process

To receive an Overseas Finding for an overseas R&D activity, the company must demonstrate that it meets the following 4 conditions:

1. The overseas R&D activity must be an R&D activity (meet the R&D Tax Incentive 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 and the Australian core R&D activity can’t be completed without conducting the overseas activity.
3. The overseas R&D activity must not be able to be conducted in Australia or its external Territories.
4. The costs of overseas R&D activities must be less than the costs of related R&D activities undertaken solely in Australia.

When should I start the process?

Applications for Advance and Overseas Findings must be lodged before the end of the income year of the registrant. Late applications cannot be accepted under any circumstances.

Advance and Overseas Finding Applications can be complex. If a company considers an Advance and Overseas Finding Application, the process should be started as soon as possible and well before the Application deadline on 30 June 2023.

How can SW help?

Our R&D Tax Incentive experts have extensive experience in preparing Advance and Overseas Finding Applications and assist in:

• determining the eligibility of overseas activities
• providing guidance regarding the required evidence to demonstrate why an activity can’t be solely conducted in Australia
• the preparation of detailed Advance and Overseas Finding Applications
• the finding process post-lodgement of the Application.  

Contributors

Thomas Demel, Senior Manager R&D Tax and Government Incentives Tax

Lachlan Murfett, Assistant R&D Tax and Government Incentives Tax

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