The Bill including the Governments R & D incentive package was introduced yesterday. This is the Bill relating to our Blog a couple of weeks ago on the proposed Research and Development Boost.
Under the draft rules a new tax credit will be available for certain expenditure related to research and development activity or supporting research and development activity.
Under the draft bill a credit will be allowed 15% of relevant R & D expenditure up to $120 million.
Prior R & D rules have relied on general definitions and the accounting standards to determine what is research and development. For the purposes of this credit these have been further defined. In essence it is expenditure related to creating new knowledge or new and improved processes. The credit is not available where the taxpayer receives a Callaghan Innovation Growth Grant.
The Bill also includes a substantial list of expenditure which will be specifically included from the definition of research and development activity. The list is quite extensive and will require careful consideration to ensure any proposed activity where you intend to receive a credit is not caught.
The Bill allows for the first $255,000 of credit to be refunded with any remaining credit carried forward to following years.