New Research and Development Tax Credit to boost innovation and investment
29 August 2011
The Australian Government’s A$1.8 billion Research and Development (R&D) Tax Credit was passed by the Parliament on 24 August, ushering in a new era for investment and innovation.
This measure will act as a key attraction and differentiating factor for Australia as global firms increasingly look to focus their R&D efforts or partner with leading research organisations to remain competitive long-term. At a local level, it will enhance innovation and sustain highly-skilled, high-wage jobs.
Starting retrospectively from 1 July 2011, the new incentives provide an attractive environment for foreign investors to establish research activities and partnerships.
The two core components of the Credit are a 45 per cent refundable R&D Tax Credit for small firms with turnover of less than A$20 million and a 40 per cent non-refundable R&D Tax Credit for all other firms.
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.
The Credit is part of the broader Innovation Agenda of the Federal Government which seeks to build productivity within Australian industry by supporting R&D and innovation across many industry sectors. For example, the Government’s multi-billion dollar Clean Energy Future program will drive innovation and new technologies in key areas of global concern such as renewable energy.
"The R&D Tax Credit will act as a beacon to attract more firms, particularly small and medium firms, to undertake research and development in Australia," Australian Innovation Minister, Senator Kim Carr said.
More information
|