In the first week of December 2019, the government reintroduced legislation to reform the R&D Tax Incentive (the Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019, which can be found here along with its Explanatory Memorandum).

A previous attempt to reform R&D concessions never made it through the Senate, perhaps due to these being bundled in with other reforms (in a bill named Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2018), targeting other measures such as thin capitalisation and online hotel bookings. A senate committee recommended further consideration on the R&D aspects of that bill, especially with respect to a proposed “intensity” threshold and refundable offset cap.

The latest proposal to reform the R&D Tax Incentive (R&DTI) continues along lines similar to those previously proposed, with some minor adjustments to the intensity threshold ranges.

In announcing the new bill, Treasurer Josh Frydenberg says “companies with an annual turnover below $20 million will receive a 13.5 percentage point premium above their tax rate to support their R&D.  These companies will also have their cash refunds capped at $4 million per annum (with expenditure towards clinical trials excluded from the cap)” — which he says is twice the amount recommended in the review of the previous R&DTI. Readmore