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VIRTUALISATION Interim R&D tax incentives will drive recovery: Carr
VIRTUALISATION Interim R&D tax incentives will drive recovery: Carr | Interim R&D tax incentives will drive recovery: Carr |
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| by James Riley | |
| Thursday, 10 September 2009 | |
  
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The changes were first mooted in the Cutler review of the innovation system handed to Senator Carr last year and were flagged in the May budget. Raising the expenditure cap to $2 million was always considered an interim measure, which will run only for the 2009-10 financial year. In the meantime, the much bigger task of drafting laws to replace the existing R&D Tax Concession with a simplified R&D Tax Credit – as recommended by the Cutler review – to be introduced next financial year. “This interim measure is the first step in a series of significant reforms for all companies, big and small, to the way Government supports R&D investment in Australia,” Senator Carr said. “Once implemented, the new R&D Tax Credit will provide more effective and predictable support for Australian companies conducting R&D in Australia. “In the meantime, the Government is addressing a long standing concern about the R&D expenditure threshold for the Offset and I encourage all eligible firms to take advantage of this change,” Senator Carr said. A spokeswoman for Senator Carr told iTWire would be guidelines and consultations would take place with industry to discuss how government is designing the scheme and what it will look like, prior to legislation being introduced to the parliament. Government says the new R&D Tax Credit will better reflect the financial realities facing many businesses and help local companies take advantage of generous incentives to innovate as the economy recovers. The new Tax Credit will mean a 45 per cent refundable credit for firms with an annual turnover of less than $20 million – equivalent to a Tax Concession of 150 per cent. The measures mean companies will receive a tax refund of 45 per cent of their R&D spending at tax return time. The measure effectively doubles the standard level of support for small and medium sized companies, and reverses the Howard governments long-ago decision to cut the R&D Tax Concession when it first came to office. |
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