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Tech Industry Leaders Petition to PM Lobbying Against R&D Tax Reforms

Reports have emerged that the chiefs of Australia’s leading technology companies collaborated in sending a joint letter to Prime Minister Scott Morrison on Friday.

The letter was signed by leaders at Atlassian, Canva, Airwallex, Culture Amp, StartupAUS, Prospa, Freelancer, NextDC among others.

The letter has expressed particular concerns regarding:

• Australian investment in research and development lagging behind peer OECD nations;
• The proposed reforms to reduce the R&D Tax Offset;
• The retrospective implementation of the reforms, if passed as law;

A bill to reform the R&D Tax Incentive is currently being considered by the Senate Economics Committee, who are due to report their findings shortly.

The current bill is a slightly modified version of a previous reform bill, which did not pass through the Senate, and previous review by the Senate Economics Committee noted concerns around the proposed intensity threshold and refundable offset cap.

Swanson Reed’s position is that:

• The current bill to reform the R&D Tax Incentive should be withdrawn altogether due to the seemingly unanimous condemnation of it by all relevant stakeholders;
• If the bill is passed, that an amendment be made to defer the start date of the bill to be FY21 or FY22, to allow companies sufficient time to attain and understand relevant guidance material on the reform’s implementation.

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.