RD Tax Incentive and other incentives to support Australia’s growing cybersecurity industry
The Australian cyber market generates $2.4 billion in GDP. In 2020 alone, Australians spent $5.6 billion on cyber security products and services, according to Australia’s Cyber Security Sector Competitiveness Plan 2022 from AustCyber. As the number of cyber-attacks increases and gets more sophisticated, the market is predicted to generate $800 million more annually by 2026. In 2027, cyber revenue generation is expected to grow to over $7 billion. Thus, Australia supports R&D Tax incentive for cyber market.
R&D Tax incentive for cyber marketing
Due to Australia’s accommodating regulatory environment and proximity to a large number of clients in Asia, it is an ideal location for developing and deploying cyber solutions. Many businesses around the world choose Australia to invest in cybersecurity.
Recently, the Australian government has passed legislation imposing positive cyber security obligations across 11 industries. These obligations will require more than 2000 organisations to improve their cyber security by creating a risk management program. All these reasons make investing in cybersecurity R&D attractive.
To support your cyber innovation, there are several programs and incentives you can look into:
- R&D Tax Incentive Program
The R&D Tax Incentive is most beneficial for startups and loss-making companies due to refundable components. If your company’s annual turnover is less than $20 million, you can get a 43.5% refundable tax offset. The ATO refunds cash through your company tax return when you have sufficient tax losses and R&D expenditures. For example, if you spent $200,000 on R&D as a pre-revenue startup, you could get an $87,000 tax refund.
- REDSPICE Program
A program with a $5 billion budget for boosting cyber hunt operations and cyber security capabilities for the Australian Signals Directorate.
- Cyber Security Skills Partnership Innovation Fund
This funding encourages innovative projects in the field of cybersecurity that will help upskill and diversify employees in the sector.
- Australian Defence Force Cyber Gap Program
This program is intended to improve the employability and skill set of Australians in the cybersecurity industry.
- State-based incentives
Some states offer payroll tax breaks and employment subsidies to support employment in the sector. Austrade can help investors select the visa that best suits their needs.
Innercode has specialist expertise in technology industries (which include cyber security) as well as the R&D Tax Incentive. For over 10 years, the team at Innercode has been assisting with the R&D Tax Incentive for software and hardware companies alike. We have seen clients who have started with us as pre-revenue startups become multi-billion-dollar enterprises. We are best placed to maximise the R&D activities and benefits while minimising audit and regulatory issues. With our help, we can make claiming the R&D Tax Incentive for your cyber security activities the most beneficial and easiest process possible, as you can rely on both our technical knowledge and knowledge of the R&D Tax Incentive.
Further reading:
Claiming R&D for Cybersecurity Projects – Innercode. 2 Nov. 2022, https://innercode.com.au/innercode/claiming-rd-for-cybersecurity-projects/
Sources:
Commission, Australian Trade, and Investment. Insight – Australia’s A$7 Billion Cyber Security o. https://www.austrade.gov.au/news/insights/insight-australia-s-a-7-billion-cyber-security-opportunity. Accessed 24 Jan. 2023.
SCP-2022 – Homepage | AustCyber. https://www.austcyber.com/resources/sector-competitiveness-plan. Accessed 24 Jan. 2023.
