Changes to the R&D Tax Incentive Program

The R&D tax incentive program provides around $2 billion in support for companies conducting experimental development of new products and services.

There have been changes to the R&D tax incentive that apply from 1 July 2022.

The Research and development tax incentive now applies at a rate that depends on the company tax rate and the turnover of the company group, as follows:

  • An aggregated turnover below $20 million. In this case the refundable R&D tax offset will now be a premium of 18.5 percentage points above the claimant’s company tax rate. That tax rate for base rate entities is 25% and for non-base rate entities is 30% in the year ended 30 June 2023.
  • An aggregated turnover of $20 million or more. In this case a two-tiered premium now applies that ties the rates of the non-refundable R&D tax offset to the incremental intensity of the R&D expenditure as a proportion of total expenditure for the year.

The new R&D tax incentive rates will be the claimant’s company tax rate plus:

  • 8.5 percentage points for R&D expenditure up to 2 per cent R&D intensity
  • 16.5 percentage points for R&D expenditure above 2 per cent R&D intensity

Prime is available to discuss how the new company tax rates or R&D tax incentive rates might apply. For any enquiries or support please contact the following:

Melbourne

Brendan Brownbrendanb@primefinancial.com.au
Simone Quinsimoneq@primefinancial.com.au

Brisbane

Sean Finchamseanf@primefinancial.com.au

This post is provided by Prime Accounting and Business Advisory Pty Ltd. Liability limited by a scheme approved under Professional Standards Legislation. This post is not a substitute for independent professional advice. We do not warrant the accuracy, completeness or adequacy of the information or material in this post. All information is subject to change without notice. We and each party providing material displayed in this post disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. You should make your own enquiries before entering into any transaction on the basis of information or material in this post. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.

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