Posted By: R&D SmartTax

The Federal Government has confirmed that the New R&D Tax Credit will officially commence on 1 July 2011, although the legislation has yet to pass parliament. This brings an end to much uncertainty for businesses who had been told that the rules for the New R&D Tax Credit would apply retrospectively to 1 July 2010. Now companies can proceed with their 2011 R&D Tax Claims with confidence, knowing that they can claim under the tried and true R&D Tax Concession and R&D Tax Offset programs.

The Government has also promised a sweetener for small to medium businesses with the introduction in 2014 of a quarterly payment system for the R&D Tax Credit instead of the usual lump sum cheque. This will help with the management of cashflow through the year.

With crossbencher support now available is is hoped that the Government doesn’t rush the legislation through without key changes to the complex and potentially unfair feedstock and dominant purpose provisions. With 1 July only weeks away, the more certainty that can be provided to companies wanting to step up investment into Australia’s lagging economy, the better.

For the full media release, please see below. And to get ready for your 2011 R&D Tax Claim, including a FREE eligibility analysis, please visit R&D SmartTax here.


15 Jun 2011


Joint media release with the Treasurer, the Hon Wayne Swan MP.

Australian companies will become more innovative and globally competitive thanks to the new R&D tax incentive.

The Gillard Labor Government’s $1.8 billion R&D Tax Credit will deliver more funding to innovative firms – including manufacturers, ICT and biotech – increasing productivity and Australia’s national income.

This builds on Labor’s policy reform agenda of the past four years and will be a major benefit for businesses that innovate and use R&D as a platform for future growth.

Today we welcome crossbench Senators announcing their support which means the parliamentary road-block put in place by the Coalition will finally be removed.

The new and improved Credit will target more funds to genuine R&D deserving of public support – good news for industry and better value for taxpayers.

It will deliver a 45 per cent refundable tax credit to companies with an aggregated turnover of less than $20 million and a 40 per cent non-refundable offset to all others.

This will allow more firms to benefit from our massive boost to the innovation, science and research budget, helping them grasp the opportunities of our transition to a cleaner economy.

We welcome the commitment of industry, the Greens and independent parliamentarians who have put good policy ahead of political posturing in supporting this reform. 

The development is the culmination of an extensive consultation and negotiation process.

Following discussions with the Greens, the Government will introduce quarterly payments for small and medium businesses from 1 January 2014. These firms will get their credit sooner, significantly improving their cash flow and incentive to invest in R&D.

The deferral of the start date to 1 July 2011 has an overall impact of $40 million, with a negative impact of $310 million in 2011-12 and a positive impact in 2012-13 of $270 million.

The Government will continue to work in partnership with the business community to get the most from this landmark reform. An advisory group will be established through the Innovation Australia Board to monitor the implementation and operation of the Credit. The Government, through AusIndustry, will run an extensive education program to ensure firms are kept up to date.

A printable version of the media release [PDF 97KB] is available.

About R&DSmartTax

R&D SmartTax tools were born out of a desire to help the many smart small Australian companies access the R&D Tax Break benefits without the need for hours spent reading tax literature or expensive consultant fees. The R&D Eligibility Wizard is designed to be low cost, easy to use and available for all Australian industries.


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Australian Institute of Commercialisation

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