Mid-size businesses welcome Senate support of innovation incentives

Mid-size businesses, especially those in the technology, life sciences and manufacturing sectors, today welcome the news from the Senate that will see the rate for research and development incentives unchanged, allowing these businesses to continue to receive tax incentives to innovate and remain competitive.

The proposed changes to the rate of the research and development (R&D) tax offset by 1.5% was opposed in the Senate today and agreed to by the House of Representatives, meaning the change in rate will not occur.

“This is positive news for many mid-size businesses for whom the reduction in the rate would have meant an actual cash decrease. In innovation, every dollar counts, so to have certainty that the rates will remain as they are, is very welcomed.

“With the resolution of this proposal and the passing of the $100 million cap on expenditure, from a legislative perspective there are no other matters relating to R&D outstanding.

“What remains to be seen is the impact of the introduction of the cap on expenditure. This measure has the potential to push R&D offshore because the margin provided by the R&D tax offset to large companies is diminished. This could stifle activity in the local technology, life sciences and manufacturing sectors by taking away opportunities to be involved in leading developments,” said Sukvinder Heyer, National Head of Research & Development Tax, Grant Thornton Australia.

Helina Lilley - National Public Relations Manager T +61 2 8297 2421 M  0437 725 520 E helina.lilley@au.gt.com