• Research and development tax incentive (offset)

    On 16 September 2016, the Budget Savings (Omnibus) Act 2016, which reduced the rates available under the research and development tax incentives, received Royal Assent.

    The research and development tax incentive is the primary mechanism by which the Commonwealth seeks to encourage companies to undertake research and development activities in Australia.

    Eligible entities with annual turnover of less than $20 million and which are not controlled by an exempt entity or entities may obtain a refundable tax offset equal to 43.5% of their first $100 million of eligible research and development expenditure in an income year and a further refundable tax offset equal to the amount by which their research and development expenditure exceeds $100 million multiplied by the company rate.

    All other eligible entities may obtain a non-refundable tax offset equal to 38.5% of their eligible research and development expenditure and a further non-refundable tax offset equal to the amount by which their research and development expenditure exceeds $100 million multiplied by the company tax rate.

    The new tax offset rates apply to income years starting on or after 1 July 2016.

    For more information, see Research and development tax incentive.

    Legislation and supporting material

    The Budget Savings (Omnibus) Act 2016External Link received Royal Assent on 16 September 2016.

    More information

      Last modified: 23 Sep 2016QC 21847