3D printing: Claiming the R&D Tax Incentive
There are different ways to manufacture products, but one that is revolutionising the industry is 3D printing. It is a form of additive manufacturing, where an object is created by adding material layer by layer. 3D printing can be used in just about any industry, examples of the most cutting-edge ones include transportation, medical, electronics, construction and the food industry. The method can be used to create components of airplanes, cars, and other machines and electronics, develop medical tools and even body parts using human cells, build houses, as well as create food. Apart from its usefulness and efficiency, the method is also cost-effective, making this an appealing option for manufacturers from sectors all over. This sector of the industry is also eligible of the R&D Tax Incentive.
If you are using 3D printing to create customised parts that involve high complexity or contain unique properties, there is a significant chance they could be eligible for the Research & Development tax incentive. Do take note that claiming R&D Tax is not merely based on the output of your project, but rather, the process undertaken in developing the product or prototype.
In the legislation, Research & Development activities can fall under two types: they must either be core or supporting activities. Core activities follow the systematic progression of work and are hypothesis-driven. They are experimental activities to which the outcome cannot be determined in advance by experts in the field. On the other hand, supporting activities are not part of the experimental activities, but are conducted for the dominant purpose of supporting the core activity.
Below are some 3D printing-related activities that may be considered valid core R&D activities:
- Experimenting with new material to balance different elements; for instance, decreasing the brittleness while maintaining the flexibility of a 3D-printed part
- Improving the accuracy of a 3D printing process
- Developing a completely new product using 3D printing
- Improving a technical process that would reduce the cost of large-scale 3D printing
Examples of supporting activities in 3D printing and hardware and manufacturing in general are:
- Conducting a literature review before conducting experiments to find out whether the knowledge to solve the technical problem pertaining to 3D printing exists
- Testing the product, processes, or prototypes
- Planning and managing tasks involved in the conduct of the core activity
- Assembling and training 3D prototypes
Self-assessing the eligibility of your manufacturing and hardware-related development activities such as 3D printing could be daunting. But with our years of experience delivering the R&D Tax incentive and other government grants for software and tech companies – many of which specialise in hardware including 3D printing, we have developed a streamlined methodology to make the R&D tax incentive claims simpler. Furthermore, we are always updated with the changes in the implementation of the R&D tax incentive scheme. Thus, we are confident that we can help you determine your eligible projects and activities, as well as maximise the amount of eligible expenditure that you can claim for your projects.
Further reading:
- ‘Claiming R&D for Hardware and Manufacturing’. Innercode, 12 Apr. 2021, https://innercode.com.au/innercode/claiming-rd-for-hardware-and-manufacturing/.
