A bill to change the rate from currently 43.5% to instead 18.5% plus the corporate tax rate from 1 July 2021 for entities with an aggregated turnover that is less than $20M and for expenditure incurred from 1 July 2021 for companies with a 30 June year end. For those that are over $20M, the rate depends on the R&D intensity (that is the percentage of R&D expenditure incurred by the company to total expenditure).
The Research and development tax incentive was amended in November to:
Legislation was passed in December that relate to how the Export Market Development Grant (EMDG) will be administered and calculated, although detailed guidelines remaining pending. Those of you familiar with the program will be aware that historically you would apply for relevant activity that occurred in the past year. The changes reorient the EMDG to a more traditional grants scheme with upfront funding agreements for eligible exporters.
The key differences in the new program are:
1. Likely annual application window will only be 4-6 weeks. In 2021, you can continue to apply under the existing program for export activity conducted in July 2020 – June 2021 and simultaneously under the new program for proposed export activity from 1 July 2021.
2. Applicants will be broken into tiers and those tiers will determine how much funding you are eligible for:
3. Abolition of the export earnings test.
4. Applicants have a financial turnover of less than $20m the financial year before your application.
To determine which tier your business will fall into, you will need to use the International Readiness Indicator Tool on Austrade’s website available here.
You can also distinguish which tier your business falls into based on the following:
This tier will require that you demonstrate that you are ready to export through relevant training or through your understanding of what it takes to export.
This tier will require that you demonstrate you have a plan to expand your marketing for your product and that you have already exported your product or service.
This tier will require that you demonstrate you have a plan to expand your marketing for your product by making a strategic shift.
This tier will require that you demonstrate you have a plan to market your members products (if you are applying for funding to undertake marketing). Your plan must be for the products your members have a designated connection.
Alternatively demonstrate that you have the skills and experience to train members to become ready to export (if you are applying for funding to undertake training).
Once approved you will enter into an agreement with the government. The agreement will identify:
Approved applicants will need to demonstrate that they have spent money on eligible expenses to support their export plans. The agreement will set out when you get the money. Austrade may ask for information in relation to expenditure to support the milestone payments. Prime is available to discuss this new process.
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