The Rudd Government today released draft legislation for the new R&D Tax Credit — the biggest reform to business innovation policy in over a decade.
Under the new R&D Tax Credit, companies can invest with certainty knowing they can claim a tax offset of at least 40 per cent of their expenditure on R&D activities, rising to 45 per cent for companies with a turnover of less than $20 million.
The R&D Tax Credit will allow small innovative firms to get an immediate contribution towards their R&D spend even if they are not yet turning a profit. For example, a company in tax loss turning over $10 million and spending $1 million on eligible R&D activities will now receive a refund of $450,000 rather than adding $375,000 to its tax loss. This will provide innovative start-ups with the certainty they need to invest in growing their business.
The exposure draft legislation follows on from the consultation paper released in September 2009.
The legislation is expected to be introduced into Parliament in early 2010 to ensure that taxpayers have certainty well ahead of the proposed 1 July 2010 start date for the new scheme.
Submissions on the exposure draft legislation and explanatory materials are requested by Friday, 5 February 2010. The exposure draft legislation and explanatory materials can be found on the Treasury website www.treasury.gov.au
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