Just Another Day In Parliament House – R&D Bills Delayed and Something Else Happened
You could be forgiven for missing out on yesterday’s news that the R&D Tax Credit legislation was not considered by the Senate before it concluded its current sitting thereby ensuring that the Credit will not be law by 1 July 2010. After all, it was a pretty quiet day in Canberra yesterday and not much was going on.
However, even though the Tax Laws Amendment (Research and Development) Bill 2010 and Income Tax Rates Amendment (Research and Development) Bill 2010 (the Bills) were due to be debated yesterday, the Senate ran out of time and the Bill was removed from the order of business without comment.
Where does this leave the Bills?
For the moment the existing R&D Tax Concession will continue to apply until it is repealed and replaced by the Bills. This cannot occur before the next sitting of the Senate in late August. At this point, it is anyone’s guess whether it will be affected by the timing of the next election or by the restructuring of the Government under Prime Minister Gillard.
There is still the possibility that the legislation may be enacted to come into effect retrospectively on 1 July 2010 but only if it is before the election. However, the Opposition and minor parties, especially Family First would be likely to prefer a commencement date of 1 July 2011. If the Federal Election is called before the Bills are passed then the Bills will lapse and will need to be reintroduced in the new Parliament.
This is both good and bad. It is bad because it will delay the introduction of the positive changes in the Bills, especially the higher rates, the relaxing of the IP ownership rules and the removal of the 175% incremental amounts.
The good thing is that this delay can be used to overcome the difficulties with the Bills. It may provide opportunities to amend the Bills and for further consultation on their application. It will give the program administrators more time to provide guidance material and to work with businesses and advisors so they can prepare and plan for the changes prior to them come into force.
MJA will continue to send further updates with any news and we will be in touch soon with a more detailed analysis of the likely passage of the proposed Bills.
Should you wish to discuss this matter any further, please do not hesitate to contact Kris Gale directly on (02) 9810 7211 or using our contact form to discuss the matters raised in this MJA Update in greater detail.
Comments
- The R&D Tax Incentive – Like the Footy Finalists, Take It One Week at A Time
- R&D Tax Credit finally passed through the Senate
- Alas, poor R&D project, we knew you well
- Are We There Yet? Are We There Yet? Are We There Yet?
- MJA on Switzer
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