DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Accounting Treatment of R&D Tax Incentive


#1

How should one account for the R&D tax incentive? This tax incentive is like a government grant, and it is not a deduction on the tax that you pay, it’s basically a cash injection straight to the bank. However I don’t think this is income as I think this grant is not subject to income tax.


#2

From accounting point of view it is still income so you should have an income account called Government grants or something like that.

From tax point of view, it might not be tax-assessable income but that’s up to your accountant to filter out from P&L all amounts that are not tax-assessable or not tax-deductible. As per accounting standards, it is still income regardless whether you pay income tax on it or not.


#3

Awesome thanks.