Budget 2019: R&D Tax Incentive Programme Cost Reductions with No Specific Detail

April 3rd, 2019 new AAT case

The Federal Government handed down their budget on 2 April 2019 and whilst there appeared to be no specific new changes proposed to the R&D Tax Incentive, the forward estimates cost of the programme is projected to reduce by $1.35 billion.

It is not clear whether this cost reduction is a product of:

  • The legislative changes proposed in the last federal budget being introduced. These changes were recently the subject of a Senate Economics Committee review that recommended the changes be deferred;
  • Additional changes not yet announced by the government; or
  • Other factors, such as declining company registration of R&D expenditure.

The opposition labor party have previously indicated that they would seek to “preserve” the R&D Tax Incentive and with a federal election due in the coming months, R&D Tax may become an important political agenda item for businesses conducting R&D.


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