From Minister Macfarlane
Driving Innovation through Australian business
The drive to find a competitive edge is a powerful force that Australia must harness.
It is through the ingenuity and inventiveness of our homegrown businesses that our economy will stay globally competitive, and our society will continue to enjoy increasing prosperity.
If we are going to succeed in the global market, our products and services need to be smart, available and saleable - and therefore our scientific know-how must be closely aligned with the entrepreneurial spirit embodied in our nation’s industries and businesses.
That’s why the Australian Government’s widely used R&D Tax Incentive is more important than ever.
New guidance released
Scale-up Specific Issue Guidance
A key requirement of the legislation governing the R&D Tax Incentive is that the outcome of experiments conducted within a core R&D activity must not be able to be known or determined in advance of conducting the experiments. Because products, devices, processes or technologies that are being scaled-up are already understood at a smaller scale, it is critical that before registering scale-up activities, companies consider why the outcomes of specific activities could only be determined by conducting further experiments.
Companies will also need to consider which specific activities are experimental, and which are not. This guidance helps companies understand the key issues to consider when they are self-assessing the eligibility of scale-up activities under the R&D Tax Incentive.
R&D Tax Incentive eLearning course
In 2013, AusIndustry developed and piloted an R&D Tax Incentive curriculum entitled R&DTax101 - Introduction to the R&D Tax Incentive. The pilot curriculum aimed to introduce the fundamentals of the R&D Tax Incentive to non-R&D specialised accounting and tax professionals who assist small and medium-sized enterprises (SMEs).
Work is currently underway to update the curriculum eLearning course for wider use. While the pilot eLearning course was specifically targeted to tax agents and accountants, the updated course will be available for use by all programme participants, including prospective new programme customers.
The course is designed to provide SMEs and their accountants and tax agents with greater awareness and understanding of how SMEs might benefit from claiming the R&D Tax Incentive. The new eLearning course is expected to be available via business.gov.au in the coming months.
Austrade - helping Australian business succeed
Whether you are a seasoned exporter or about to begin, talking to the Australian Trade Commission is one of the best moves you can make.
The Australian Trade Commission – Austrade – is the Australian Government’s agency that promotes trade, investment and education, and develops tourism policy and research.
Austrade’s team of experienced advisers, located across the world, assist Australian businesses with the knowledge, advice and practical support to help them succeed in global markets. Tailored services are focussed on markets where Austrade can provide the most benefit.
$100 million threshold registration administrative arrangements
With effect from 1 July 2014, a $100 million threshold applies to the R&D expenditure for which companies can claim a concessional tax offset under the R&D Tax Incentive. For any R&D expenditure amounts above $100 million, companies will still be able to claim a tax offset at the company tax rate.
AusIndustry has developed guidance to inform companies and their advisors of the registration administrative arrangements that will apply to relevant registrations.
This guidance includes information on what to do if a company registers $100 million of activities and compliance findings by Innovation Australia establish that registered activities are not eligible R&D activities, or ATO compliance activities establish that expenditure on registered activities is not eligible R&D expenditure.
R&D Tax Incentive Review
The Australian Government announced its intention to examine support for research and development (R&D), including the R&D Tax Incentive programme, in the context of the Tax White Paper (TWP). The TWP discussion paper, Re:think – Better tax, better Australia, was released for public consultation on 30 March 2015, with the R&D Tax Incentive included as a feature.
The Review will evaluate the programme’s effectiveness and efficiency, as well as assessing the extent to which it is meeting its intended policy objectives.
The Centre for International Economics (CIE) has been engaged to provide independent advice to the Review.
Tax review submission
Innovation Australia’s submission to Re:think – Better tax, better Australia
As part of its legislated role to advise the Australian Government on matters relating to innovation and Australian businesses, Innovation Australia has made a submission to the Re:think – Better tax, better Australia review of the Australian tax system.
Innovation Australia’s submission explores the importance of innovation to our nation with a particular focus on the role of the R&D Tax Incentive and other innovation support measures.
The submission is an insightful and thought provoking document and is recommended reading for those working in the R&D Tax Incentive space.
Australian Forum for Operational Oceanography
AusIndustry supported and attended the Australian Forum for Operational Oceanography, which was held in Fremantle on 21-23 July 2015. This is the first event of its kind to be held in Australia, and brought together industry, researchers and public sector agencies from across Australia and from overseas.
Carnegie Wave Energy - creating an oceanic wave of energy
Carnegie Wave Energy (CWE) is the inventor, owner and developer of the patented CETO wave energy technology.
CETO converts ocean swell into zero-emission renewable power and desalinated freshwater. CWE and partners spent over 10 years and over $60m developing this innovative and sustainable power generating technology in the coastal town of Fremantle, WA.
R&D tax assistance has helped CWE accelerate their R&D more efficiently and with greater confidence than would have otherwise been possible.
Reminder for business
R&D Tax Incentive Snapshot
Don’t know much about the R&D Tax Incentive? Or know a business that wants to learn about the programme? The R&D Tax Incentive Snapshot is the perfect place to start.
As the name implies, it’s a ‘Snapshot’ of the benefits, eligibility requirements and how to apply, and also includes customer testimonials and industry sector case studies to help you start in the right direction.
Strong registrations continue for R&D Tax Incentive
As at 30 June 2015, more than 13,600 companies (some of which are part of a consolidated group for tax purposes) had registered $18.40 billion of R&D expenditure for the incomplete 2013-14 income period.
Compared to registrations received during the same period in the previous year, this is an increase in R&D-performing entities, with a slight decrease in R&D expenditure.
In addition, over 3,300 new registrants (including some which are grouped for tax purposes) were new to the programme. Eighty three percent of registrations received for 2013-14 were from companies with an aggregated turnover of less than $20 million.
R&D Tax Incentive in Your Neighbourhood
Check out your local office updates and find out what is happening in your State or Territory today!