The Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019 (‘the Bill’) was introduced on the 5 December 2019 to reform RDTIs. Treasurer Josh Frydenberg described these reforms as “targeting and improving the integrity and sustainability of the research and development tax incentive”.
The Bill’s proposed changes included a $4 million cash refund cap for small companies with an annual turnover less than $20 million. Larger companies with an annual turnover more than $20 million would have their tax offset measured by the company’s “R&D intensity”.
On 21 August 2020, the Economics Legislation Committee delayed the reporting of the inquiry yet again to 12 October 2020.
Submissions to the Senate inquiry and representatives at a public hearing also reveal a resounding resistance to the reforms. These reforms also appear to hit engineers and scientists in manufacturing the hardest.
The delays create major uncertainty for Australian businesses. This places businesses in a vulnerable position, risking lodging their tax return without knowledge of potential legislation which may be enacted in the future.