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No R&D for large Australian based multinationals

Deloitte Federal Budget media release


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14 May 2013: Reconfirming previous announcements, large Australian business is expected to be denied access to the R&D tax incentive with effect from 1 July 2013, a change estimated to provide a gain to revenue of $1.1 billion over the four-year forward estimates period.

Multinational companies and groups with income assessable in Australia of $20 billion or more would no longer be eligible to make a claim for the R&D incentive after the income year ended 30 June 2013, removing access to an additional 10% net tax benefit available in respect of eligible R&D expenditure. Notably the new test would still allow multinational groups with a turnover of more than $20 billion, but less than $20 billion assessable in Australia, to access the Australian R&D tax incentive.

This announcement, if enacted, would impact a number of the big Australian banks, the large miners and major players in the Australian consumer business, telecommunications and retail sectors.  

Serg Duchini, Lead Partner, R&D Tax and Government Incentives at Deloitte, said: “The proposed move to exclude big business from the regime represents an international R&D precedent. There is a real concern that Australian based multinational groups will relocate their R&D activities offshore to existing sites in more favourable R&D jurisdictions. The companies affected have the ability to choose the location of their R&D activities more readily given their resources.”

Any companies or groups concerned with this potential legislative development should consider making a submission to Government.

Deloitte’s Federal Budget 2013 website
Follow Deloitte’s Federal Budget 2013 on Twitter @FederalBudget

NB: See our media releases and research at www.deloitte.com.au

Contacts

Name:
Serg Duchini
Company:
Deloitte Australia
Job Title:
Partner, Tax
Phone:
Tel: +61 3 9671 7376
Email
sduchini@deloitte.com.au
Name:
Vessa Playfair
Company:
Deloitte Australia
Job Title:
Head of Corporate Affairs
Phone:
Tel: +61 2 9322 7576, Mobile: +61 4 1926 7676
Email
vplayfair@deloitte.com.au

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