Research and Development is often the first critical step in innovation. It drives technological improvements that lead to productivity improvements and increased economic growth. Companies tend to underinvest in R&D for several reasons, including:
This is why the government is encouraging industry to invest more in R&D. The tax incentive offers a way for companies to invest in R&D while alleviating some of their initial reasons for not investing.
The tax incentive reduces company R&D costs by offering tax offsets for eligible R&D expenditure.
Eligible companies with a turnover of less than $20 million receive a refundable tax offset, allowing the benefit to be paid as a cash refund if they are in a tax loss position. All other eligible companies receive a non-refundable tax offset to help reduce the tax they pay.
The program is available to companies who are: