The Government has proposed a reduction in the R&D Tax Incentive program by 1.5%. And if this sounds familiar, yes, it is a new attempt to achieve the rate cut that was attempted numerous times throughout the last three years.

As of 16 September 2016, the Bill has passed both Houses and the change will impact both the refundable and non-refundable rates of the R&D Tax Incentive with a reduction of 1.5% effective from 1 July 2016.

This means that:
– Refundable tax offset (equivalent to a 150% deduction) for eligible entities with an aggregated turnover of less than $20 million per annum, provided they are not controlled by income tax exempt entities, will be reduced from 45% to 43.5%.
– Non-refundable tax offset (equivalent to 133% deduction) for all other eligible entities will be reduced from 40% to 38.5%.

This will affect all R&D claims for the 2016-17 financial year (specifically, R&D expenditure incurred from 1 July this year) but not the claims currently being processed for 2015-16 financial year.

Please feel free to call us on 03 9853 9853 to discuss this if you have any further questions about your R&D Tax Incentive claim.