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What the ATO 2023 R&D Tax Incentive Transparency Report Tells Us | Link R&D Advisory

You are here: Home Practical Reflections 2023 R&D Tax Incentive Transparency ReportWhat the ATO 2023 R&D Tax Incentive Transparency Report Tells Us

The ATO has released its 2023 R&D Tax Incentive (RDTI) Transparency Report. Kashcade has also published a detailed secondary analysis of the data, making this the second year where we’ve had a clearer picture of how Australian businesses are using the program.

While the raw data highlights scale and growth, there are deeper questions to consider around who benefits most, what participation looks like in WA, and how recent rule changes affect outcomes for claimants.

Growth and reach.

Nearly 13,000 companies claimed in FY23.
Total R&D expenditure rose to $16.2 billion, up 42% from FY22.
Claimant survival rates remained strong, with 79% returning from the previous year.
Only 0.62% of all Australian companies utilise the program.

This shows the program is still central to Australia’s innovation economy, even as overall business failure rates remain much higher outside the RDTI population.

Industry breakdown.

The RDTI continues to be concentrated in a handful of industries. The Professional, Scientific and Technical Services sector again led the way, accounting for $6.2 billion in claims (38% of total expenditure) and 44% of all participating companies.

Manufacturing, mining, and information media & telecommunications also made significant contributions, but the data underlines how heavily the program leans toward knowledge-intensive sectors.

While this concentration shows strong alignment with Australia’s innovation strengths, it also highlights the relative under-representation of industries such as agriculture and construction, areas where R&D activity often takes place but may be less likely to be captured under the program’s framework .

Who really benefits?
The top end is visible in the report. Atlassian led with a $220m claim, followed by Fortescue and Cochlear. But it’s important to remember that large companies generally receive only around 8–9% of their spend back. For above $20m profit making companies, the benefit may not always justify the compliance burden.

For startups and small businesses, the story is different. Almost half of all claimants fall into this category, and the refundable offset can provide crucial cashflow in the early years. Kashcade’s analysis shows new entrants averaged $1.2m of R&D spend (above the overall mean) reflecting the intensity of innovation at scale-up stage.

Western Australia’s perspective.
WA recorded a substantial 48% increase in R&D expenditure, the largest of any state. Perth City participation reached 1.57% of all companies, compared with the national average of 0.62%.

This underlines the strength of WA’s innovation ecosystem and the importance of regional participation beyond the traditional east coast hubs.

Transparency and adjustments.
The transparency report lists every claimant by name. Many businesses are surprised to learn this is public information. While the report discloses expenditure, it does not show the benefit actually received.

That distinction matters:

Adjustments can significantly reduce the offset.
Recent changes now treat feedstock as additional income rather than reducing R&D spend, a subtle but important shift in how claims are calculated.

Takeaway.
The 2023 Transparency Report confirms the RDTI is growing in reach, particularly for younger companies. But it also highlights the ongoing need to balance compliance with benefit, and to ensure the program delivers long-term value for Australia’s innovation economy.

Further reading.

ATO RDTI FY23 Transperancy Report

Kashcade’s Analysis of the FY23 ATO Report & Innovation Landscape