With 30 June approaching, there are a few items worth reviewing with respect to your R&D Tax Incentive (RDTI) claim before FY26 closes out. Some of these must be dealt with now, not after year-end. The checklist below sets out the items that need your attention before 30 June 2026.
Before turning to the checklist, it is worth confirming the landscape that applies to FY26 RDTI claims. The 2026–27 Federal Budget delivered the most significant rewrite of the R&D Tax Incentive program since 2011, but those reforms are proposed to commence from 1 July 2028. FY26 and FY27 claims are unaffected and continue to be administered under the current rules.
The reform package is worth understanding now to assist with forward FY28 planning, but will have little impact on how this year’s claim is prepared or assessed.
The items below are time-sensitive and best resolved while the financial year is still open. Each can carry a consequence if left until after 30 June.
| EOFY Item | Why It Matters | Action Before 30 June 2026 |
|---|---|---|
| Associate payments | Amounts incurred to an associate must be paid by 30 June 2026 to be claimed in FY26; the R&D offset associated with incurred-but-unpaid amounts are deferred to the year they are paid. | Review related-party balances, director and shareholder amounts, and intercompany costs to confirm whether payment is required before EOFY. |
| Contractor, external party and funding arrangements | Contract terms determine whether activities are conducted for your company and whether expenditure is eligible. Eligibility can turn on control, risk, IP ownership and use rights, and the link to eligible R&D. | Review key contractor, external party and funding agreements before EOFY. |
| Overseas R&D activities | Overseas expenditure is ineligible unless covered by an Advance/Overseas Finding, which must be lodged by 30 June 2026 for FY26 activities. | Identify any FY26 overseas activities now and contact us, so a Finding can be lodged before 30 June if eligible. |
| Contemporaneous records | Records made while the work is performed are stronger evidence than summaries reconstructed later. Examples include: dated timesheets, test logs, design records, version histories, trial results, decision records. | Review and update key technical and financial records before EOFY, while the work is current. |
An associate can be any related party where majority voting control and/or sufficient influence exists, including subsidiaries, parent companies, trusts, shareholders, directors, or family members.
For R&D expenditure incurred to an associate, the amount must be both incurred and paid before 30 June 2026 to be claimed in FY26. Simply incurring the expense or carrying an outstanding liability at year-end is not sufficient on its own. Where an amount is incurred but not paid by 30 June, the benefit is not lost, but it is deferred to the income year in which payment is made.
Review associate relationships now and confirm whether any outstanding amounts incurred to them on eligible R&D activities should be paid before 30 June 2026 in order to be included in the FY26 claim.
Where R&D work is performed by contractors, consultants, laboratories, or research organisations, the contract terms affect both whether the activities are conducted for your company and whether the expenditure is eligible. The assessment depends on who bears the financial risk, who controls the work, how intellectual property ownership and use rights are allocated, and how clearly the work links to eligible R&D activities.
Because these terms are fixed at the point of contracting, they are difficult to remedy retrospectively. We recommend reviewing contractor, external party, and funding agreements before EOFY to confirm that the arrangements substantiate the intended R&D claim position, in particular, that the R&D is being conducted for your company rather than for the contractor or another party.
Expenditure incurred on overseas R&D activities is generally ineligible under the R&D Tax Incentive. The exception is where the activities are covered by an Advance/Overseas Finding from the Department of Industry, Science and Resources (DISR). An approved Finding gives binding certainty over the eligibility of the activities for up to three years, so long as the nature of the activities remains the same.
Applications for an Advance/Overseas Finding must be lodged by the end of the income year in which the overseas activities are conducted. For FY26 activities, this means the application must be lodged by 30 June 2026.
The conditions for an Advance/Overseas Finding include:
The application must include detailed justification and supporting evidence for why the activity cannot be conducted in Australia, including:
Once an Advance/Overseas Finding is approved, register the covered activities in your annual R&DTI application and retain full supporting documentation – including contracts, experiment logs, travel records and invoices – demonstrating that the work was performed abroad and directly supports eligible Australian core R&D activities.
If you have overseas R&D activities in FY26, contact our specialist Gild R&D Incentives & Grants team now so that an Advance/Overseas Finding application can be lodged before 30 June if eligible.
Contemporaneous records should be created and maintained while the work is being performed, rather than reconstructed after the event. Both DISR and the ATO place significant weight on documentation when reviewing claims, and records made at the time are far more credible than a summary prepared later.
Real-time records that support a defensible claim include:
An important note on AI-generated content: AI tools can support research and drafting, but they do not replace genuine experimental records or contemporaneous source data. AI output requires technical validation. Any AI-assisted content should be carefully reviewed before it is relied upon to support your claim.
If your business has been undertaking experimentation and resolving technical problems through FY26, it is worth reviewing your eligibility position before 30 June 2026. Our specialist R&D Incentives & Grants team can work with you and your accountant to:
| Get in touch with The Gild Group’s R&D Incentives & Grants team to arrange your FY26 EOFY check-in. www.thegildgroup.com.au │ Contact us before 30 June 2026 |
