Made a profit but less than the R&D spend

Company D invested $200,000 in its R&D.

It made a profit for the year overall of $100,000.

Tax on that profit would usually be $30,000, at 30%.

However the ATO will allow the company to offset its 15% R&D Tax Incentive against this.

So 15% of $200,000 spent on R&D is $30,000.

So the final figure is $30,000 tax payable on the $100,000 profit, minus the $30,000 claimed as the R&D Tax Incentive = $0 tax payable.

Company D’s tax bill is reduced from $30,000 to zero.