New laws reshape support of Australian R&DDOWNLOAD
23 August 2011: Professional services firm, Deloitte, said the passage of the Tax Laws Amendment (Research & Development) Bill 2010 through the Senate today will deliver much needed certainty to Australian companies considering their future R&D investment programs.
Deloitte Tax Partner, Serg Duchini, said the new laws, which will apply to income years commencing on or after 1 July 2011, will require a collaborative and constructive approach to its implementation to ensure that affected stakeholders are able to extract the maximum benefit from the new program.
“This Bill will transform the way many Australian companies structure their research and development activities. Some companies are going to see considerable benefits from the new regime, while it will present new challenges for others,” Mr Duchini said.
“Under the new laws, companies with an annual group turnover of less than $20M will receive a refundable 45% R&D tax offset for uncapped expenditure incurred on a reshaped activity profile, delivering a 15% net benefit,” he said. “Entities with an annual turnover of $20M or more will receive a 40% non-refundable R&D tax offset, delivering a net benefit of 10%.”
Mr Duchini said the focus for Australian entities should be on grasping the differences between the current R&D Tax Concession and the new R&D Tax Offset and planning for the transition.
“The new R&D Tax Offset presents a number of complex issues that companies will need to navigate if they are going to extract the maximum value. These include the new definition of eligible activities, the requirement to track and cost eligible activities at a more granular level, a new regime for the treatment of feedstock expenditure and a range of expanded administrative requirements.”