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The research and development (R&D) tax concession has been replaced with the R&D tax incentive from 1 July 2011. Certain transitional arrangements will apply, but in general, the new provisions provide refundable or non-refundable tax offsets to encourage more companies to engage in R&D.
The R&D tax incentive applies to expenditure incurred and the use of depreciating assets in an income year commencing on or after 1 July 2011.
A 45% refundable tax offset, equivalent to a deduction of 150%, will be available to eligible small companies with an annual aggregate turnover of less than $20 million, provided they are not controlled by income tax exempt entities. These companies can receive a refundable tax offset of 45% of their R&D spending as part of the processing of their income tax return.
A 40% non-refundable tax offset will be available to companies with an annual aggregate turnover of $20 million or more - equivalent to a deduction of 133%. Unused offset amounts may be able to be carried forward for use in future income years.
The new tax incentive is available to corporations that are Australian residents, foreign corporations that are resident of a country with which Australia has a double tax agreement and carry on business through a permanent establishment in Australia, and to public trading trusts with a corporate trustee.
The government has also announced that it will introduce quarterly credits for small and medium businesses from 1 January 2014.
For more information, refer to the following media releases:
- media release issued on 2 September 2011 by the Minister for Innovation, Industry, Science and Research
- media release issued on 24 August 2011 by the Minister for Innovation, Industry, Science and Research
- joint media release No. 066 issued on 15 June 2011 by the Treasurer and the Minister for Innovation, Industry, Science and Research
- joint media release No. 018 issued on 31 March 2010 by the Treasurer and the Minister for Innovation, Industry, Science and Research
- joint media release No. 102 issued on 18 September 2009 by the Treasurer and Minister for Innovation, Industry, Science and Research
- joint media release No. 062 issued on 12 May 2009 by the Treasurer and the Minister for Innovation, Industry, Science and Research.
The following acts received royal assent on 8 September 2011:
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For more information refer to
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Last Modified: Tuesday, 21 August 2012