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13 Jan 10 Draft legislation on the new R&D tax incentive

In the 2009-10 Budget, the Government announced that the existing research and development tax concession will be replaced with a new research and development tax incentive from 1 July 2010.

In a joint media release issued on 18 December 2009, the Treasurer, Wayne Swan and the Minister for Innovation, Industry, Science and Research, Senator Kim Carr, announced the release for public consultation of exposure draft legislation to introduce the new Research and Development Tax Incentive. This follows on from the Treasury consultation paper on the design of the new scheme that was released on 18 September 2009.

Under the new research and development Tax Incentive, companies can invest with certainty knowing they can claim a tax offset of at least 40% of their expenditure on research and development activities, rising to 45% for companies with a turnover of less than $20 million.

The research and development Tax Incentive will allow small innovative firms to get an immediate contribution towards their research and development spend even if they are not yet turning a profit. For example, a company in tax loss turning over $10 million and spending $1 million on eligible research and development activities will now receive a refund of $450,000 rather than adding $375,000 to its tax loss. This will provide innovative start-ups with the certainty they need to invest in growing their business.

The Government intends to introduce legislation to implement the new scheme into the Parliament in early 2010.

The closing date for submissions is Friday 5 February 2010.

For a copy of the joint media release, No 2009/124, 18 December 2009, go here

For a copy of the draft legislation and explanatory material, go here


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