In response to the global recession the Rudd Government is providing more than $500 million in small business incentives and support in the 2009-10 Budget.
Various tax incentives exist in support of Australian businesses to encourage research and development activities, claim additional tax deductions and improve existing assets.
Boosting investment in research and development, supporting jobs and strengthening Australian companies as they continue to seize new opportunities is part of the Rudd Government’s broad productivity agenda. Most business managers are aware the Federal Government increased the small and general business tax break to 50 per cent for small businesses that acquire eligible assets by the end of 2009, at a cost of $141 million.
There are still more tax incentives available if you know where to look. The R&D Tax Credit will be doubled for most small businesses from 2010-11, under the new Research and Development (R&D) Tax Credit – replacing the existing R&D Tax Concession. $10 million is included in the new budget over two years to create a Small Business Support Line, with a referral service to assist small businesses during the recession.
A few of these tax concessions include:
125% Tax Concession for Research and Development
Overview: The concession enables companies incorporated in Australia and companies in partnership to deduct 125 percent of their eligible R&D expenditure when lodging corporate tax returns. Aims to improve the international competitiveness of Australian companies by increasing investment in R&D, and incentives to both acquire and improve technology.
Eligibility: Firms must register with the Industry Research and Development Board within ten months of the start of the financial year. R&D activities must involve both innovation and high technical risk in order to acquire new knowledge, or create new or improved material, products, processes or services and be carried out mainly in Australia.
Contact AusIndustry Tel: 13 28 46
175% Premium R&D Tax Concession
Overview: This concession offers a higher level of support for firms that increase R&D expenditure relative to their overall performance.
Eligibility: Companies require a three year history of registering for the 125% R&D Tax Concession. Australian subsidiaries of multinational enterprises, who do their R&D in Australia but hold the intellectual property overseas, are eligible from 1 July 2007.
Contact AusIndustry Tel: 13 28 46
R & D Tax Concession
Overview: The R&D Tax Concession provides an incentive to encourage Australian industry to undertake more research and development activities.
Eligibility: Small companies with an annual turnover of less than $5 million, whose research and development expenditure is more than $20,000, but whose 'grouped' expenditure is less than $1 million per annum, will be eligible.
Contact AusIndustry Tel: 13 28 46