Better Targeting The R&D Tax Incentive

For companies with an aggregated annual turnover of $20 million or more, the Government will introduce an R&D a premium that ties the rates of the non-refundable R&D tax offset to the incremental intensity of R&D expenditure as a proportion of total expenditure for the year. 

The maximum amount of R&D expenditure eligible for concessional R&D tax offsets will be increased from $100 million to $150 million per annum.

For companies with an aggregated annual turnover below $20 million, the refundable R&D offset will be a premium of 13.5 percentage points above a claimant’s company tax rate. 

Cash refunds from the refundable R&D tax offset will be capped at $4 million per annum.

R&D tax offsets that cannot be refunded will be carried forward as non-refundable tax offsets to future income years.

The changes will apply for income years starting on or after 1 July 2018.

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