More businesses will get more support for research and development under legislation passed by the House of Representatives.
Innovation Minister Senator Kim Carr thanked Independent MPs for supporting the R&D Tax Credit legislation, saying it was the most significant change to business R&D incentives for more than a decade. He urged the Opposition to re-think its obstructionist approach.
“The new R&D Tax Credit will help small and large businesses to innovate, to become more productive and compete in a global economy, preserving and creating jobs for Australians,” Senator Carr said.
“Reforming business R&D tax credit support will deliver better value for money for business and Australian taxpayers than the current R&D Tax Concession.
“The outmoded R&D Tax Concession failed to deliver sufficient incentives to Australia’s engine room – small and medium enterprises – and allowed some companies to use taxpayer dollars to subsidise ‘business-as-usual’ activities, rather than genuine R&D.
Senator Carr said the R&D Tax Credit will deliver the $1.6 billion available annually for business R&D in two key components:
- Small and medium enterprises will receive a 45 per cent refundable R&D tax credit, now allowing companies in tax loss to receive a cash refund – important for small businesses, especially start ups that are often cash starved. It doubles the present base rate from 7.5c to 15c in the dollar.
- Larger firms – companies with an aggregated turnover of $20 million or more – will receive a 40 per cent non-refundable R&D tax credit and can carry forward any unused offset amounts to reduce future tax liabilities. The base incentive is increased by a third from 7.5c to 10c in the dollar.
“The R&D Tax Credit is an important part of the Gillard Labor government’s microeconomic reform agenda. It will also target R&D undertaken in Australia regardless of where the intellectual property is held,” Senator Carr said.
“Passing this R&D Tax Credit legislation through the House of Representatives is good for Australia, Australian industry and for ordinary Australians, and has been made possible with the support of the Independents and Greens.”