MJA Update: Ambitious Australia: RDTI Recommendations – Urgent Correction/Clarification Needed

As we highlighted in today’s MJA Update, there is a great deal to digest in terms of the R&D Tax Incentive (RDTI) recommendations contained in the SERD Panel’s report, Ambitious Australia. Future editions of the Update will walk through these.

However, in the immediate term, MJA believes that an immediate correction/clarification is needed.

On Page 59, the Report recommends the following:

“Raising the minimum R&D project expenditure floor (currently $20k) to a minimum annual R&D project spend of $150k would limit access for companies conducting subscale R&D projects. This will calibrate the program towards encouraging companies to invest in more ambitious, high-impact R&D activities.”

We believe that this recommendation relates to the current R&D Expenditure Amount which must exceed $20,000 in an income year for an Australian taxpayer to access the RDTI. There is no legislated annual project minimum spend. In fact, the regulators have been emphasising the activities-based nature of the RDTI with the concept of a project being largely confined to being an administrative construct of the registration process.

It is critical that this matter be corrected or clarified as a matter of urgency as the recommendation would involve fundamental change to the RDTI, necessitating specific legislation as to what constitutes an RDTI project.

Should you wish to discuss any aspect of this article, do not hesitate to contact MJA.