Last week saw the passing of legislation to increase the R&D expenditure threshold for R&D Tax Offset claimants from $1 million to $2 million for the 2009/10 year (click here to access the Minister’s press release). This transitional measure is the first in a series of planned changes to Australian R&D Tax incentives that were announced in the 2009 Federal Budget, and precedes the introduction of a new R&D Tax Credit, from 1 July 2010, to replace the existing R&D Tax Concession/Offset program.

For the 2009/10 year, a company whose group turnover for the year is less than $5 million, can recover up to 37.5% of its R&D expenditure (of up to $2 million) in that year via the R&D Tax Offset election.

Under the proposed R&D Tax Credit, companies with group turnover of less than $20 million, and who are in a loss position, will be entitled to a 45% refundable tax credit for their expenditure on eligible R&D, and with no similar threshold on the level of expenditure allowable.

Program details were originally scheduled for release in late July, however BSI now understands that the first exposure drafts for R&D Tax Credit legislation will be released in October 2009.

For further information on the R&D Tax Offset, and how BSI can assist your company to access various Federal and State government incentives available for experimental R&D, call on (02) 9212 5505 or email BSI’s R&D team today.