In February 2020 the Senate referred the provisions of the Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019 which seeks to amend the R&D Tax Incentive, to the Economics Legislation Committee for inquiry.
The Senate Economics Legislation Committee was originally due to report on the changes to the research and development tax incentive (RDTI) in April, with the Coalition planning to pass the legislation this financial year and the changes to come into effect in the 2020-21 financial year.
However, in light of the global COVID-19 pandemic the committee’s report was delayed by five months, with a series of planned public hearings cancelled. It is expected that the committee will now be given until December to produce its report, with public hearings to be held in the coming months.
This means the legislation won’t be passed this financial year, raising questions over whether the contentious changes will be retrospectively applied or if modifications will be made so that it applies to the 2021-22 financial year.
We will continue to keep you updated as this continues to evolve.