Australia: new R&D tax credit

A new Australian R&D tax credit has replaced the old R&D concession for tax years on 1 July 2011 (although the relevant bills were not passed until late August).  The new regime provides a 45% repayable credit on unlimited R&D expenditure for groups with turnover of less than Aus$20m, and a 40% non-repayable credit for groups above that threshold. SMEs will be able to get quarterly repayments from 2014, to improve cash-flow and encourage reinvestment in R&D.

These credits are an increase on the old regime, paid for by a restriction on the types of R&D that will qualify – the definition has been tightened up, focussing on experimentation.

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