On 18 September 2009, the Treasurer and Minister for Innovation, Industry, Science and Research released a consultation paper on the new research and development tax incentive. The incentive, announced as part of the 2009-2010 Budget, represents a significant change to the taxation of R&D expenditure in Australia.
The new R&D Tax Credit will replace the existing R&D Tax Concession with effect from 1 July 2010 (see our previous alert). The incentive implements the key elements of the Cutler report on the Review of the National Innovation System regarding R&D taxation.
Friday’s consultation paper includes detail that was not part of the government’s initial announcement. For example, it clarifies that the new R&D tax incentive will not consider whether IP from an eligible R&D activity is owned in Australia or overseas. There are other areas flagged for further stakeholder consultation, such as the treatment of software R&D.
The release of the consultation paper marks the beginning of a stakeholder consultation process on the detail and design of the new incentive. AusIndustry is hosting public consultation sessions over September / October. Interested parties may make submissions by 26 October 2009. A further round of public consultation on exposure drafts of the legislation will occur later in the year.