New tax credits to encourage investment in Australian R&D
7 July 2011
From July 2011 new tax legislation will benefit companies, including foreign entities, investing in Australian research and development (R&D).
The Australian Government has announced a A$1.8 billion R&D Tax Credit to provide eligible companies with a tax offset for expenditure on eligible R&D activities.
The tax offsets reduce a company’s income tax liability. A 45 per cent refundable tax offset will be available for eligible companies whose turnover is less than A$20 million per year. A 40 per cent offset is available for all other eligible entities.
The list of eligible entities includes Australian companies and also foreign entities with Australian residency for tax and R&D purposes. R&D activities undertaken overseas may also be eligible, and the resulting intellectual property from R&D undertaken in Australia can reside overseas.
It is hoped the new legislation will be a major benefit for businesses that innovate and use R&D to generate future growth.
The AusIndustry website has more detail, including types of benefits, eligible entities, eligible activities, registration, overseas R&D, and information for existing R&D concession recipients.
More information
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