Following a period of uncertainty for the R&D Tax Incentive with The Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019 being held up in the senate, the Government has announced enhancement to the reforms included in the Bill with the investment of an additional $2 billion in the program. Importantly, there will be no change to the current Incentive until next year meaning businesses can proceed with their R&D claims with confidence.
From 1 July 2021 the following changes will apply to the benefit to companies are entitled to receive from the Tax Incentive:
- For companies with annual aggregated turnover less than $20 million the refundable tax offset rate will be 18.5 percentage points above the corporate tax rate. Given a corporate tax rate of 25% for small businesses in FY2022, this will see the offset remain at its current rate of 43.5%.
- Larger companies with an annual aggregated turnover of $20 million or more will fall in to one of two intensity tiers. Their benefit in the form of a non-refundable offset will depend on the company’s R&D Intensity, with an premium of percentage points above the company’s tax rate as follows:
|
Tier |
Intensity range |
Intensity premium |
|
1 |
0-2% |
8.5% |
|
2 |
2% + |
16.5% |
- The cap on annual R&D expenditure subject to the incentive will be increased from $100 million to $150 million.
Make a time to speak with our Grants and Incentive team about your R&D Tax Incentive claim.
