Bill Introduced to Cut R&D Tax Incentive Benefits

May 27, 2015 Kris Gale

The Federal Government has introduced Tax and Superannuation Laws Amendment (2015 Measures No. 3) Bill 2015 which legislates cuts in the R&D Tax Incentive Offset rates of 1.5%, applying to income tax years that commence on or after 1 July 2014.

As a result, the Refundable R&D Tax Offset rate falls from 45% to 43.5%. The Non-Refundable R&D Tax Offset rate falls from 40% to 38.5%. A similar measure that was announced in the 2014 Budget failed to be passed earlier this year.

We will provide a more detailed commentary in an MJA Update shortly. Suffice to say, applying the measure retrospectively appears very harsh as the 2014/15 fiscal year has only one month to run for June year end companies. It also seems poorly timed, given the Treasurer’s Tax Discussion Paper, “Re: think”, is seeking contributions on the Incentive with a submission close date of next Monday (1 July).

Should you wish to discuss this matter further, please do not hesitate to contact Kris Gale directly on (02) 9810 7211 or email kris.gale@mjassociates.com.au