R&D credit a real boost (2/5)

Written on the 17 June 2009

A BDO Kendalls partner has praised the Federal Government’s proposed research and development tax concession, as it will provide clearer information about the financial rewards of innovation investment.
The reforms would come into effect from July 2010, offering 45 per cent refundable tax credits for small businesses with an annual turnover less than $20 million and a 40 per cent refund to companies that earn more than $20 million.
BDO Kendalls partner Tracey Murray, says the reforms are clearly seeking to motivate Australian businesses with an additional incentive to dedicate increasingly scarce resource to R & D activities.

“Faced with the challenges associated with keeping a burgeoning deficit under control, the government’s decision to commit $1.4 billion in spending on the R&D tax credit program over the next four years is a strong reaffirmation of the integral nature and pivotal role R&D plays in assisting businesses develop innovative ideas and products.”

She says larger companies with annual revenue of more than $20 million will save 10 cents on every dollar spent on eligible R & D activities. But clarification is needed about whether loss-making companies will be able to carry refunds forward.
“The current difficult economic conditions are likely to put some successful Australian businesses into temporary loss positions and, unless non-refundable R&D tax credits can be carried forward, many businesses will be denied the benefits of this initiative when they most need it.”

Murray advises companies that would benefit from the increased incentives of the changes to investigate holding off R & D expenditure until July 2010 to maximise their claims.

“It is encouraging that the Government is seeking industry consultation with respect to the redefinition of R&D from a taxation perspective - but it is essential the R&D tax credit scheme remains focused on incentivising businesses to achieve commercially focused outcomes,” she says.


Latest News

ASF UNVEILS TRAFFIC PLANS FOR THE SPIT

A SECOND bridge over the Nerang River is the centrepiece of the ASF Consortium's plan to improve traffic flow ...

BHP AND VALE EDGE CLOSER TO $47.5 BILLION SAMARCO DAM DISASTER SETTLEMENT

BHP Billiton (ASX: BHP) and Brazilian mining company Vale have entered into a preliminary agreement with Brazilian fe...

BLK SPORT FOUNDER TYRON BRANT REMAINS CEO UNDER NEW OWNERS

BLK Sport has been purchased from receivers McGrathNicol by a private consortium composed of a TimorLeste-based oi...

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

Related News

CARSALES CEO RETIRES AS NEW COMPETITOR COX FINALISES MERGER

CARSALES will have a new CEO as it takes on a fresh challenger to its crown as the dominant online car sales portal i...

BUSINESS CONFIDENCE AT A SIX-YEAR HIGH

SMALL and medium businesses have entered 2017 with their confidence at a six-year high, building on strong gains m...

CONSUMERS PESSIMISTIC ENTERING 2017

CONSUMER confidence remains at its weakest point since April 2016, according to the latest Westpac Melbourne Institut...

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter