In December 2019, the government re-introduced a bill to reform the R&D Tax Incentive.
This bill was a slightly modified version of a previous reform bill (Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2018), which did not pass through the Senate at that time. A Senate Economics Legislation Committee recommended in February 2019 that the initial bill should be deferred from consideration until further analysis of the bill’s impact was undertaken, particularly with respect to concerns around the proposed intensity threshold and refundable offset cap.
The R&D Tax Reform bill has been uniformly criticised by companies, industry groups and R&D tax professionals, with concerns particularly directed at the “Intensity Threshold” proposal, which would punish companies with large cost bases, such as local manufacturers.
A Senate Economics Legislation committee review was being conducted on the revised bill, with a public hearing occurring on the 29th of June.
InnovationAus has reported today that:
Swanson Reed’s position is that:
We call on both sides of government to commit to a stable R&D Tax Incentive, and are of the view that the programme would be most effective in achieving its policy objectives if not subject to further proposed changes.