The R&D Tax Incentive: Senate Review Delayed; 2018/19 Registration Lodgement Extended

March 31, 2020 Kris Gale

We hope that this MJA Update finds everyone doing as well as can be expected in these very challenging times.
Not much editorial today. Just news of two changes regarding the R&D Tax Incentive (the Incentive) due to the impact of COVID-19.

R&D Tax Bill Review

Following the cancellation of the proposed public hearings, the Senate Economics Legislation Committee has a new reporting deadline in August regarding the Bill to reform the Incentive, the same month when Parliament is now slated to next return.

Submissions closed earlier this month and it is not clear whether there will now be an opportunity for additional submissions, given the reporting delay. In the end, 92 public submissions were received and they almost uniformly opposed the implementation of the Bill in its current form. These can be accessed at: https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/TLABRDTI/Submissions

If the Bill does eventually pass, it will be well into the 2020/21 financial year so it is difficult to see how it can be applied retrospectively to 1 July 2019. As such, MJA urges the Federal Government to confirm as a matter of priority that 2019/20 R&D tax claims will be made under the current legislation which represents a higher level of benefit for taxpayers across the board.

Registration Deadline Extended 

AusIndustry has announced that it will accept applications for the 1 July 2018 to 30 June 2019 income year until 30 September 2020. 

Companies are not required to request an extension of time during this period. If the company is unable to lodge its application by 30 September 2020, it may request an extension of time.

It is worth remembering that a company is still required to provide its R&D Tax Incentive registration receipt number when lodging its R&D Tax Incentive Schedule with the Australian Taxation Office so the sooner the company registers, the sooner it can access the R&D Offset.

Should you wish to discuss this issue further, please don’t hesitate to contact Kris Gale, on 0411 171 596 or kris.gale@mjassociates.com.au.