Advance and overseas findings: when to apply and why

If your Australian company does research and development and any of that work happens outside Australia, or if you just want certainty before you lodge an R&D tax claim, the advance finding and overseas finding processes were built for you. They let you ask AusIndustry to confirm upfront whether your activities are eligible and whether overseas expenditure can form part of your R&D Tax Incentive claim. When you get a positive finding, you remove a great deal of guesswork and you give your registered tax agent a solid foundation to rely on when they prepare and lodge the company’s tax return.

In this article we walk through exactly what these findings are, when you need to apply (the deadlines are non‑negotiable and easy to miss), and how to put yourself in the best position to receive a favourable answer. It is not tax or legal advice; always confirm your position with a registered tax agent who can review your facts against the current legislation, rulings and ATO guidance. The responsibility for the final claim sits with you and your accountant. At GrantsMAX, we prepare an evidence‑backed pack from your own accounting data that your accountant can use when they work with you on the finding application and the eventual R&D claim, but the accountant remains in control and lodges through the official channels.

Prerequisites

Before you start a finding application, a few things should already be in place. You do not need to have registered a core R&D activity yet; you can apply for a finding concurrently, but you must meet the basic conditions of the R&D Tax Incentive program.

1. Your entity must be an eligible R&D entity. For most private companies, this means you are an Australian resident company, or a foreign company that carries on business in Australia and has an Australian permanent establishment that does the R&D. The ATO’s overview of the incentive explains the core definitions, and the AusIndustry guidance on overseas findings sets out additional tests that apply when work is performed abroad.

2. You have identified a specific set of experimental activities. You are not asking for a blanket approval of your whole business. A finding covers only the activities you describe in the application. You need to be able to articulate them clearly and link them to a genuine knowledge gap, a hypothesis and a systematic process of experimentation.

3. You understand the difference between core and supporting R&D activities. The finding may confirm that an activity is a core R&D activity, or it may also confirm that certain work is eligible as a supporting activity directly related to the core. Know which category each activity falls into before you start.

4. You have the right records ready. AusIndustry may ask for contemporaneous evidence: project plans, technical specifications, testing logs, emails that show the evolution of the experiments. If you are using GrantsMAX’s AI Application Pack Drafting, the platform organises expense data from Xero, MYOB or QuickBooks and ties it to activity narratives, making it easier for your accountant to present a well‑supported application. But raw data still needs to be reviewed and refined by a human.

5. Your registered tax agent is involved early. Even though the finding application is lodged with AusIndustry, it flows into your tax return later. An accountant who understands the R&D Tax Incentive can flag whether a finding is the right tool for your situation, and can pressure‑test the scope before you commit to a formal application. The Accountant Review & Lodge Workflow within GrantsMAX is built for exactly that collaboration.

Step 1: Know the difference between an advance finding and an overseas finding

Even experienced claimants sometimes confuse the two.

An advance finding deals with the eligibility of domestic R&D activities. You ask AusIndustry to confirm that a proposed or current activity is a core or supporting R&D activity under the legislation. The main benefit is certainty: if you receive a positive advance finding, the Commissioner of Taxation cannot later argue that the activity was not eligible, provided you carried it out as described in the finding. Businesses often seek an advance finding when they are attempting something novel but unusual, where the border between R&D and normal product improvement is blurry. For example, a manufacturer developing a new forming process might want binding certainty before it spends a full year on the work.

An overseas finding deals with the requirement that R&D activities must ordinarily be carried on solely in Australia. The tax law recognises that in some cases it is impractical or impossible to do all the work here, perhaps you need access to a unique offshore testing facility, or a critical prototype can only be built by a specialist overseas firm. Without an overseas finding, expenditure incurred on R&D activities conducted outside Australia is generally excluded from the R&D Tax Incentive. By obtaining a positive overseas finding, you receive a declaration that the activities you described are covered by an exception to the onshore rule, allowing eligible overseas expenditure to be included in your claim.

Specialist advisory firms such as Swanson Reed and Radium Capital have written helpful overviews of both types of findings, and they emphasise a point we repeat often: the application must be precise. A finding does nothing if the activities you end up performing are materially different from those you described.

Step 2: Decide whether you need one, or both

Not every R&D claimant needs a finding. You can register activities with AusIndustry and claim the offset in your tax return without ever applying for a finding. The ATO and AusIndustry each review claims on their merits. But in several common scenarios a finding becomes valuable.

You should consider an advance finding if:

• You are trying something genuinely novel and you worry that AusIndustry might view it as routine product development.
• You have been flagged for review in the past and you want to de‑risk a future claim.
• You are about to commit substantial resources and need the board, investors or lenders to be confident that the R&D Tax Incentive will be available.

You should consider an overseas finding if:

• Any part of your R&D is physically done outside Australia, even if you are directing it from here.
• You are paying an overseas contractor to perform experiments, write code or test prototypes.
• You send employees overseas to conduct field trials or observe testing.

The cost of an application is not trivial in time, you need to prepare a detailed technical brief, but for businesses with material overseas expenditure, the upside far outweighs the effort. A senior accountant from one of the Big 4 R&D teams stated in a Grant Thornton blog post that missing the deadline by even a week can disallow hundreds of thousands of dollars in overseas costs.

Step 3: Understand the strict timing rules

Timing is everything with findings, and the deadlines are not extensions of the usual R&D registration window. For an overseas finding, the law says you must apply before the earlier of:

• 12 months after the end of the income year in which the overseas activities occurred; or
• the day you lodge your company tax return for that income year.

This means you cannot simply wait until the accountant is finalising your tax return and then ask for a retrospective overseas finding, by then it is too late. The application must be lodged before the tax return is submitted. In practice, if you lodge your tax return in January for a 30 June year end, you’d need to apply for the overseas finding by early January at the latest. Many advisors, including Swanson Reed, recommend applying at least six to eight weeks before you plan to lodge the return, because AusIndustry processing times can vary and you may need to respond to a request for further information.

For an advance finding, the timing is slightly less acute because you are not required to link it to a specific tax return lodgment date. However, a practical deadline exists: you want the finding in hand before you commit to the bulk of the expenditure. If you wait until the end of the income year, you have already incurred the costs and the finding, while still providing certainty, cannot be used to guide go/no‑go decisions.

The Department of Industry, Science and Resources publishes current application forms and step‑by‑step instructions. Always confirm the exact deadline for your income year by visiting business.gov.au or speaking with your registered tax agent, because legislative changes or ATO administrative practice can shift dates.

Pro tip: Set a calendar reminder for 10 months after your balance date. This gives you a two‑month buffer before the hard 12‑month deadline. Many businesses also choose to lodge their tax return on extension in order to create more time, but extending the return does not extend the 12‑month clock.

Step 4: Prepare a tight, evidence‑led application

The finding application is a technical document. AusIndustry wants to see:

• A clear hypothesis: what scientific or technical uncertainty are you trying to resolve?
• The systematic progression of experiments: what did you do, in what order, and why?
• The activities carried out in Australia and the activities carried out overseas, with a justification for each overseas element.
• Contemporaneous records that support your story.

It is not enough to write “we are developing a new widget and we sent a prototype to China for testing.” You need to explain the specific technical problem, why the test could not be done in Australia, what outcome you achieved and how that outcome advanced the core R&D activity.

The IRIS guide on overseas findings offers a useful checklist: define the overseas R&D activities precisely, explain why they meet the “significant scientific link” test, and detail why the activities could not have been carried out in Australia. If the overseas work could have been done here but you chose convenience, the finding will almost certainly be refused.

The Intellect Labs how‑to also notes that AusIndustry frequently pushes back if the Australian and overseas activities are not clearly separated in the application. Break out each distinct workstream and show the thread that connects the domestic core work to the overseas supporting work.

GrantsMAX’s Eligibility Assessment & Risk Flags module can help your accountant identify which areas of your claim are most likely to attract scrutiny, so you can address potential weaknesses in the narrative before submitting the finding application. But the final submission is done by your registered tax agent through the AusIndustry online portal, not by software.

Step 5: Lodge through the correct channel

All finding applications are lodged through the business.gov.au portal. You will need an AUSkey or myGovID (as determined by the current authentication method) and you must be an authorised representative of the company. While a director can lodge, it is far more common for the registered tax agent to manage the submission because they understand the legislative language and can spot errors before they become a refusal.

After lodgment, you will receive an acknowledgement from AusIndustry. The processing time can be anywhere from a few weeks to a few months, depending on the complexity and the queue. If AusIndustry asks for more information, respond promptly and thoroughly; a request for information is not a sign of trouble, but delaying your response can push you past the deadline if the finding is required before you lodge your return.

Warning: If your overseas finding application is not decided before you lodge your tax return, you may need to exclude the overseas expenditure from that return and later amend if the finding is positive. This is messy and can trigger unnecessary ATO review activity. Plan to have the finding in hand before the return is lodged.

Step 6: Use the finding in your financial statements and R&D claim

A positive finding is not a claim in itself. It is a ruling that certain activities meet the legislative definition. When you prepare your company’s R&D schedule for the tax return, you must still:

• Quantify the notional deductions for the eligible activities.
• Apply the correct offset rate. For example, the 2024‑25 income year refundable R&D tax offset rate for entities with aggregated turnover below $20 million is 43.5 per cent, but rates and thresholds can change; always verify the current rate with the ATO.
• Complete the R&D Tax Incentive schedule and lodge it with the income tax return.

Your registered tax agent will use the finding to support the position taken in the return. For an overseas finding, they will include the declaration number as proof that the overseas expenditure is eligible. If the ATO later reviews the claim, the finding provides a strong first line of defence, but it does not eliminate the need for proper records. The evidence trail must still exist. The Audit‑Ready Evidence Trail that GrantsMAX builds across emails, invoices and timesheets can help here, though the accountant ultimately validates that the evidence matches the finding’s scope.

Step 7: Keep the finding alive and current

A finding does not last forever. If your R&D project changes direction, or if you start new overseas activities not covered by the original finding, you need to apply again. The original finding only applies to the income years you nominated and to the activities you described. If you expanded into a new country in year two, or if the technical uncertainty evolved, you will likely need a fresh overseas finding.

Similarly, a finding that was granted in one income year needs to be examined every year to make sure the activities remain materially the same. Your accountant will include this in their annual review. They may also recommend a new advance finding if the character of the work has shifted so much that the original finding could be seen as irrelevant.

Pro tips and common pitfalls

• Start early. The biggest mistake is treating the finding application as a tax‑return afterthought. Begin drafting the technical description while the experiments are fresh in the engineers’ minds.
• Involve the technical team directly. Accountants cannot invent the science. The most successful applications are written by the people who did the work, with the accountant shaping the language to match the program criteria.
• Document why work had to be done overseas. A one‑sentence statement is insufficient. Show that you tried to find an Australian provider, explain the unique offshore capability, and keep emails that demonstrate the search.
• Do not assume a grant approval equals a R&D finding. State government innovation grants and the Export Market Development Grant serve different purposes. An EMDG grant helps with promotion costs; it does not speak to the technical eligibility of your R&D. That said, if you are pursuing export grants, GrantsMAX for exporters and EMDG claimants can help you organise the spend data.
• Beware of scope creep. If you receive an overseas finding for a specific set of activities in India, do not assume you can later add activities in Vietnam without a new finding.

Conclusion and key takeaways

Advance and overseas findings are powerful tools that bring certainty to R&D tax claims, but they come with firm deadlines and a high evidence bar. The main lessons:

1. Apply for a finding before you need it. Overseas finding applications must be lodged before the tax return, and practically before the end of the claim year if you want the finding to guide business decisions.
2. Your registered tax agent is your gatekeeper. They will confirm whether a finding is right for you, prepare the application and lodge it. Software like GrantsMAX can help by surfacing what you may be eligible for and by drafting the activity narratives and cost structure from your own Xero, MYOB or QuickBooks data, but the agent reviews and lodges.
3. Precision and evidence win. AusIndustry will not accept vague descriptions. The application must explain the technical problem, the systematic experiments and the reason any work happened overseas.
4. A finding is a shield, not a sword. It protects the eligibility of described activities, but it does not guarantee a particular refund or offset amount, and it does not substitute for proper record‑keeping.
5. Changes to the program are ongoing. The government has proposed changes to the refundable offset turnover threshold; always check the current legislation with the ATO before you rely on any figure.

If your business is developing something genuinely new and a chunk of that effort sits outside Australia, exploring an overseas finding is one of the most high‑impact things you can do this quarter. Take the time to get it right.

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