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Glossary

Cooperative Research Centre contributions: R&D spend with its own rules

Cash contributions a company makes under the Cooperative Research Centres (CRC) program are notional R&D deductions once the CRC spends them on R&D activities the company has registered. They are exempt from the $20,000 minimum, the conducted-for test and recoupment clawback, but CRC spending funded by Commonwealth money is excluded.

Reviewed by George WalchFacts last verified

Example

An illustrative food technology company, a participant in a CRC, contributes $40,000 cash in the year to 30 June 2026, and the CRC spends it on shelf-life experiments in 2026-27. Once the company is registered for those activities, the $40,000 is a notional deduction for the year it was incurred, with no $20,000 floor. Its two staff seconded to the project count under the ordinary rules instead.

Legislative reference: Income Tax Assessment Act 1997, s 355-580 (CRC contributions), s 355-100(2) table item 2 and s 355-440(1)(a)

Related terms: rsp, minimum expenditure threshold, clawback, conducted for, notional deductions

Cooperative Research Centres are industry-led research collaborations funded partly by the Commonwealth. Subdivision 355-K gives a company's cash contributions to one a simpler path into the R&D Tax Incentive than most spend.

The four concessions

  1. No $20,000 floor. Section 355-100(2) lets CRC contributions earn an offset even when total notional deductions are under $20,000.
  2. No conducted-for test. The ATO says it is not necessary to work out for whom the CRC's activities are conducted.
  3. No recoupment clawback. Recoupments under the CRC program are excluded from clawback.
  4. Timing. Section 355-580(1) gives the deduction for the year the contribution is incurred, if the money has been or will be spent on activities the company is registered for. The ATO says that holds even if the CRC spends it, and the company registers, in a later year.

The limits

  • Only money counts. In-kind contributions are valued and treated as the company's own R&D expenditure.
  • The CRC must spend the money on R&D activities the company is registered for.
  • CRC spending funded by Commonwealth money is not deductible by anyone.
  • The same contribution cannot be claimed again under another provision, and an asset bought with CRC money earns no decline in value deduction.

The program itself

The program has two streams. CRC Grants fund a centre: a collaboration of 3 to 10 years with at least three Australian industry organisations and two research organisations, covering up to 50% of eligible costs. CRC Projects (CRC-P) grants fund a short project of up to 3 years, between $100,000 and $3 million, led by a small or medium enterprise. Both must be at least matched with cash or in-kind contributions. A CRC-P is not a centre, so check how a contribution to one is structured before relying on the concessions above. The other route around the floor is a research service provider. The clawback page covers grants outside the CRC program. The exposure draft of the 2026-27 Budget changes (consultation 10 to 28 September 2026) proposes a $50,000 minimum for income years starting on or after 1 July 2028 that would still exempt CRC contributions; that is proposed, not law (see the $50,000 minimum spend).

Frequently asked questions

Does staff time given to a CRC count as a CRC contribution?
Not under section 355-580, which covers money only. In-kind contributions are valued and treated as the company's own R&D expenditure, subject to the usual rules, including the $20,000 minimum.
What if the CRC spends the money in the following year?
The company registers the activities for the year they are conducted, and the deduction still relates to the income year the contribution was incurred.

Sources

  1. Income Tax Assessment Act 1997, Subdivision 355-K, s 355-580 (Federal Register of Legislation)
  2. ATO, Expenditure you can claim (contributions under the CRC program)
  3. business.gov.au, Cooperative Research Centres (CRC) Grants

The R&D Tax Incentive is a self-assessment program. This page is general information, not tax, legal or financial advice; eligibility depends on your circumstances and you should seek independent advice for them.