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Fintechs declare access to strong R&D Tax Programmes key to keeping R&D in Australia

The Age has reported the results of a recent EY census of Fintech companies, which has found consensus among respondents who consider that having access to strong R&D tax programs increased the likelihood of keeping their business onshore rather than moving overseas.

The census paper noted that:

• “Generous R&D tax incentive programs are available overseas and for Australia’s nearest neighbors Indonesia, Hong Kong and New Zealand, are seeing increased funding from governments with popular support from industry,”
• “Australia must be competitive in both its support for R&D and its R&D incentive administration.”

The article has contrasted the findings of the census, against the proposed legislative reforms to the R&D Tax Incentive, which Treasurer Josh Frydenberg had advised the Sydney Morning Herald and The Age have not been shelved for good

The bill to enact previously proposed reforms (Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2018), did not pass through the Senate last year, and a Senate Economics Legislation Committee recommended that the bill should be deferred from consideration until further analysis of the bill’s impact is undertaken, particularly with respect to concerns around the proposed intensity threshold and refundable offset cap.

The article has also noted that the Fintech sector welcomes collaboration with the Industry Minister, Karen Andrews in respect of clarity on what can and can’t be claimed for software R&D claims. Ms Andrews was reported to have met with software industry leaders in recent months to discuss the eligibility of software development activities under the R&D Tax Incentive.