Australia Shakes Up R&D Credits
February 18, 2013 Taxation in Australia
CANBERRA – Australia’s biggest businesses will soon pay more tax while small innovative firms around the country will receive an extra helping hand, as the government juggles the tax breaks and assistance offered to businesses engaged in research and development.
In a statement released on February 17th the Prime Minister of Australia Julia Gillard announced that the Australian businesses with turnovers exceeding AUD 20 billion would no longer be eligible to receive tax credits for their research and development activities.
According to the Prime Minister the change to the rules will affect approximately 20 of the country’s biggest business, and will lead to savings of nearly AUD 1 billion over the course of the next four years.
Explaining the decision to cut the tax break, the Prime Minister said “…on balance, it simply isn’t necessary to fund the largest and most profitable Australian companies to innovate, when their resources to do this themselves are so clear”, and she added that the government can make significant savings by removing poorly targeted tax breaks and redirecting the assistance to “evidence-based assistance for the small to medium sector.”
The money saved by the change will be used to fund several projects aimed at encouraging greater innovation amongst small and medium sized firms in Australia, and will include granting a greater number of monetary incentives to qualifying businesses, establish several new business precincts aimed at fostering development, and by providing more funding to start up companies.
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