R & D Incentive Changes for Large Companies

Business Advisory Services Updates

In the recent budget, the Australian government made changes to the research and development system applicable for large companies (turnovers over $20M).  In so doing, the government repealed its proposed legislation, which has been stalled in the Senate.

Companies with annual turnovers of $20M or more will still face a tiered intensity approach that will now see two tier levels instead of three.

The marginal research & development premium will be 8.5% above the company’s tax rate for R & D expenditure between 0% and 2% R & D intensity (R & D % of turnover).

For companies with R & D intensity above 2%, the R & D premium will rise to 16.5%.

The government is deferring the start date for the changes until 1 July 2021 to give certainty to businesses that research and development tax claims, made in relation to the 2019/20 and 2020/21 income years, will be subject to the current legislation.

Research and development advice is a segment of Business Advisory Services that accountants can deliver to medium-sized enterprises.

ESS BIZTOOLS has a Research and Development Product Package to assist accountants to deliver professional advice.

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R & D Incentive Changes for Large Companies