The R & D Tax incentive is calculated two ways depending on what offset you are eligible for:

1.    45% refundable R & D tax offset; and

2.    40% non - refundable R & D tax offset. 45% refundable R & D tax offset For the year ended 30 June 2013, an R & D entity entitled to the 45% refundable R & D tax offset incurred $1,000,000 notional deductions.  Their aggregated turnover was $15,000,000 and they are not an exempt entity. The calculation would be as follows: $1,000,000 x 45% = $450,000. 40% non - refundable R & D tax offset

For the year ended 30 June 2013, an R & D entity entitled to the 40% non - refundable R & D tax offset incurred $15,000,000 of notional deductions.  Their aggregated turnover was $60,000,000 and they are not an exempt entity. The calculation would be as follows: $15,000,000 x 40% = $6,000,000