On the last sitting day of 2019, the Federal Government introduced a Bill to the House of Representatives to revise the R&D Tax Incentive program. After a two month break from Parliament, debate resumed last Thursday, 6th February.
Labor supported the passage of the Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019 through the House of Representatives so that it could be referred to the same Senate committee that rejected it in February 2019, with the Opposition noting that a number of amendments would also likely be later moved in the upper house. This means that there will be another inquiry into the proposed changes to the Research and Development Tax Incentive in part to determine whether the Coalition has adequately addressed concerns the committee raised in its report early last year.
The Opposition also has a number of concerns with the bill as it stands and have flagged their intention to interrogate the unintended consequences of the reform including the potential for it to drive jobs and R&D offshore and whether the changes will unfairly disadvantage SMEs and start-ups. The changes include a $4 million cap on annual cash refunds for companies with an annual turnover of less than $20 million, with refundable tax offsets to be then calculated as 13.5 percentage points above the claimant’s company tax rate, and an “intensity measure” to determine the size of the offset for larger companies.
The Senate economic legislation committee’s report is due by 30 April 2020.
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