Made a profit more than the R&D spend

Company B invested $200,000 in R&D during the tax year.

Company B is in profit, to the tune of $300,000.

Its tax bill will be 30% per cent of that, which is $90,000.

However the ATO will allow a 15% rebate as the R&D Tax Incentive.

So 15% of the $200,000 invested in R&D is $30,000.

That $30,000 comes straight off the company’s tax bill.

So Company B’s tax bill is reduced from $90,000 down to $60,000.