Published on 01 Oct 11
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
The new R&D tax incentive regime replaces the R&D tax concession program, with an effective start date for the first financial year starting on or after 1 July 2011. According to the government, the key features of the new system include "more generous benefits, in particular for SMEs, a clearer definition of R&D activities" and "greater certainty in R&D investment, with companies able to seek an advance finding from Innovation Australia where they are uncertain of the eligibility of their activity".
This article examines the R&D tax incentive in detail, and concludes that, in the opinion of both industry and the R&D tax consulting business, the new incentive is fraught with uncertainty surrounding the eligibility of activities and an increase in compliance requirements. The increased base rate offered by the new incentive is positive for industry. However, given the perceived tightening of eligibility criteria, the actual R&D incentive available may be smaller overall.