R&D Tax Credit

Last year the government amended this grant and made it even more attractive. Effective from July 2010, the new research and development (R&D) tax credit is a market driven government incentive package. In plain English this is a 45% refundable tax credit for companies engaged in R&D and earning less than $20 million a year. For those earning more there is still money out there but it is less; a non-refundable 40% tax credit.

Businesses eligible for the credit must be:

  • Australian corporations;
  • corporations that are Australian residents for tax purposes;
  • foreign corporations that carry on R&D activities though a permanent establishment in Australia; and
  • Corporations acting as trustee of a public trading trust.

Any business that fits the bill is eligible for this very generous credit. Any company engaging in R&D would be remiss not to take advantage of this hugely generous offer. Anyone unsure about whether his or her activities qualify under the R&D umbrella can request an assessment of eligibility prior to commencement.

The new R&D tax incentive is contained in the Tax Laws Amendment (Research and Development) Bill 2010 and the Income Tax Rates Amendment (Research and Development) Bill 2010, available at www.aph.gov.au.

Other Grants