The Australian government on September 28 released a draft report suggesting ways to improve the country’s research and development (R&D) tax incentive and asking for public feedback on the report’s recommendations.
The review, prepared by Australia’s Department of Industry, Innovation, and Science, aims to upgrade the effectiveness and integrity of Australia’s R&D program.
The report reccomends the introduction of $2 million cap on the annual cash refund payable under the R&D tax incentive, with remaining offsets to be treated as a non-refundable tax offset carried forward for use against future taxable income.
The report also suggests that the credit be further targeted by permitting access to the scheme through the introduction of an intensity requirement where only companies directing a specified percentage of their total business expenses to R&D would receive the non-refundable tax offsets.
The report recommends that extra incentives be granted to businesses that hire PhD graduates in STEM fields and that collaborate with Australian research institutions.
It also suggests that the government clarify the scope of activities and expenses eligible for the credit and suggests options for improving the administration of the tax incentive
Submissions are invited until October 28. The government intends to hold industry and state-based roundtables in all states and territories. Further discussions will be held in November and December after all the submissions have been received.
The government intends to prepare a final response by March 2017.
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