Australia's R&D Tax Credit Opens For Business
Andrew Miles
R&D Tax Credit Opens For Business Great News For SMEs Down The RoadThe Federal Government has confirmed that the revised start date of the R&D Tax Credit will be 1 July 2011 in a joint release from the Treasurer and the Minister for Innovation, Industry, Science and Research. In a sweetener for SMEs, loss-making claimants will be eligible for quarterly payments of their Credit entitlements from 1 January 2014. Something to look forward to! The text of the press release appears below. CROSSBENCH SUPPORT MEANS NEW R&D TAX CREDIT WILL START ON 1 JULY 2011 "Australian companies will become more innovative and globally competitive thanks to the new R&D tax incentive. The Gillard Labor Government’s $1.8 billion R&D Tax Credit will deliver more funding to innovative firms – including manufacturers, ICT and biotech – increasing productivity and Australia’s national income. This builds on Labor’s policy reform agenda of the past four years and will be a major benefit for businesses that innovate and use R&D as a platform for future growth. Today we welcome crossbench Senators announcing their support which means the parliamentary road-block put in place by the Coalition will finally be removed. The new and improved Credit will target more funds to genuine R&D deserving of public support – good news for industry and better value for taxpayers. It will deliver a 45 per cent refundable tax credit to companies with an aggregated turnover of less than $20 million and a 40 per cent non-refundable offset to all others. This will allow more firms to benefit from our massive boost to the innovation, science and research budget, helping them grasp the opportunities of our transition to a cleaner economy. We welcome the commitment of industry, the Greens and independent parliamentarians who have put good policy ahead of political posturing in supporting this reform. The development is the culmination of an extensive consultation and negotiation process. Following discussions with the Greens, the Government will introduce quarterly payments for small and medium businesses from 1 January 2014. These firms will get their credit sooner, significantly improving their cash flow and incentive to invest in R&D. The deferral of the start date to 1 July 2011 has an overall impact of $40m, with a negative impact of $310m in 2011-12 and a positive impact in 2012-13 of $270m. The Government will continue to work in partnership with the business community to get the most from this landmark reform. An advisory group will be established through the Innovation Australia Board to monitor the implementation and operation of the Credit. The Government, through AusIndustry, will run an extensive education program to ensure firms are kept up to date".
MJA will keep you informed of all major developments as the Credit legislation becomes law.
Should you wish to discuss this matter any further, please do not hesitate to contact Andrew Miles directly on 0431 162 212 or and...@mjassoc.com.au |
drllau
NZ OpEd perspective on R&D tax credits. Summary
- worries that firms will reclassify existing work as research and
development to gain tax credits, rather than actually innovate
- not sufficient for economic growth
- author's opinion that increased government spending on R&D is
compelling (based on Finland)
The problem I see with the last point is that picking winners has
never been a bureacrat's skillset. And judging on VC performance,
perhaps not even WallStreet ...
Lawrence
http://nz.linkedin.com/in/drllau
Jonathon Blackford
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Ben Thompson
R&D Tax Credit is a self assessment, similar to personal income tax,
where you work you may already be conducting would be classified as
R&D by the legislation, and therefore eligible for tax incentives.
This is the rebadged and repurposed legislation that currently covers
the R&D Tax Concession. They have tried to cut out the big end of town
(mining) to focus on SMEs, changed a few definitions relating to R&D
and eligibility, and upped the level of support and introduced a
quarterly (rather than yearly) rebate for companies operating in tax
loss
On Jun 18, 10:13 am, Jonathon Blackford <jonathonblackf...@gmail.com>
wrote:
> understand the ability of any particular government bureaucrat is irrelevant
> to the way this money is being 'distributed'. The theory with this system is
> that it will encourage private enterprise to invest in R&D ventures that
> THEY decide have potential.
>
> Did I miss something?
>
>
>
>
>
>
>
>
> >http://sciblogs.co.nz/a-measure-of-science/2011/05/24/lifting-new-zea...
> > NZ OpEd perspective on R&D tax credits. Summary
>
> > - worries that firms will reclassify existing work as research and
> > development to gain tax credits, rather than actually innovate
> > - not sufficient for economic growth
> > - author's opinion that increased government spending on R&D is
> > compelling (based on Finland)
>
> > The problem I see with the last point is that picking winners has
> > never been a bureacrat's skillset. And judging on VC performance,
> > perhaps not even WallStreet ...
>
> > Lawrence
> >http://nz.linkedin.com/in/drllau
>
> > --
> > You received this message because you are subscribed to the Silicon Beach
> > Australia mailing list.
>
> > Guidelines on discussion:
Geoff McQueen - Hiive Systems
I'm told that under the old system a mining company could claim the "development" of their roads and other fixed infrastructure by saying they were experimenting with what gradient was most efficient for their big tonka trucks. As a taxpayer: ouch.
Jonathon, perhaps you're railing about another program that is administered by AusIndustry, the Commercialisation Australian program. There's already been a lot of discussion, most of it unflattering on the list about it http://bit.ly/ltM8d1, and I'd tend to agree with you that it doesn't look like something that will get great outcomes for Aussie industry or taxpayers.
Geoff
Guidelines on discussion: http://groups.google.com/group/silicon-beach-australia/msg/351e183e1303508d?hl=en%3Fhl%3Den
Jonathon Blackford
opposition to the equivalent NZ system.
I was downplaying my confidence in understanding the system a little.
Totally agree with you both.
Jonathon.
On 20/06/2011, at 8:18 PM, Geoff McQueen - Hiive Systems
Geoff Langdale
out that Jonathon does not appear to be railing about anything, and is
giving a basically accurate, neutral portrayal of how tax credits work
that's not in contradiction to anything subsequently stated on the
thread. However, I think he, in turn, is misunderstanding Lawrence's
post - I think the only bit that referred to bureaucrats picking
winners was Lawrence's discussion of the third point in the paper he
links to. So you're all talking past each other.
The R&D tax credit/concession is a fine program for the most part.
The review process is a bit weird - the survey that have to fill out
if you're selected for review seems to have some peculiar ideas about
R&D, and one of the questions asks you to give a response from the
perspective of an omniscient possessor of 'world knowledge'. Naturally
that's not a problem for me but I don't know about all you guys. :-)
Attempting to convey 'why your stuff is actually R&D' while
simultaneously keeping answers brief and readable by a non-specialist
audience was also a challenge. If you're in a technical area, you
might well have to provide about 2-3x as much material as requested
("one page per question") as pure background material before any non-
specialist might conceivably understand why the task you're solving
isn't easy/obvious/incremental. I may have been overthinking my
response, though.
If you're really doing R&D, and you're paying salaries (doesn't work
so well for the ramen and sleeping on a couch set), and you're not
looking into getting the credit/concession, you need your head
examined.
Geoff.
On Jun 21, 1:16 pm, Geoff McQueen - Hiive Systems
> Yeah, I'm right there with you Ben. I've been pretty impressed with the R&D tax concession in previous years, and while there has been talk about them favouring University (often wasteful) research over commercial software research and product development done in-house, the changes that have just gone through are much much better for SMEs.
>
> I'm told that under the old system a mining company could claim the "development" of their roads and other fixed infrastructure by saying they were experimenting with what gradient was most efficient for their big tonka trucks. As a taxpayer: ouch.
>
Ben Thompson
Concession with some mining clients I disagree that they were
frivolous in what was classified R&D. Happy to talk more offline about
it.
Geoff L: Agree with your cranial diagnosis.
If anyone has any questions about the legislation and wants some tips
and where to go for more info drop me a line, happy to assist and put
to my knowledge base to use.
Geoff McQueen - Hiive Systems
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