Posted By: R&D SmartTax

Labour’s controversial new R&D Tax Credit bill looked like it was set for the green light after receiving support from all independents in the House of Representatives last week to go through to the Senate.  However support from the Senate was not so forthcoming with two Senators seeking amendments to the bill leaving Labour high and dry and with no new R&D tax legislation being passed before Christmas.

Senator Kim Carr, Minister for Innovation, Industry, Science and Research was scathing of the Coalition’s opposition to the bill, stating that ” The Coalition’s deliberate filibustering in the Senate has once again deprived thousands of businesses of vital funds to help turn good ideas into commercial reality.”

Many business groups, however, are cheering at the news that the bill failed to get through, particularly as amendments sought in the Senate include the requirement that the new R&D Tax Credit not commence until 1 July 2011 and also that the Federal Government removes the dominant purpose test. The dominant purpose test means supporting activities are only allowed to be claimed if the dominant purpose is to support research and development activities. Under this test supporting activities that had any commercial purpose to them would be ineligible.

Whether these amendments get through will require more patience from Australia’s innovation community as it now waits until parliament’s next sitting early in 2011. As the new R&D Tax Credit controversey continues to drag out and the end of the financial year draws near, it is becoming more of a safer bet that the start date will be 1 July 2011 rather than the retrospective application to 1 July 2010.

Our recommendation is business as usual for the current R&D Tax Concession and R&D Tax Offset programs.

To take advantage of the current status and claim your rightful tax refund, use R&D SmartTax’s R&D Eligibility Wizard and R&D Application Wizard. Both tools eliminate months of work in the R&D tax claim process. The R&D Eligibility Wizard helps companies to easily self-assess their eligibility and the R&D Application Wizard is a one-step tool that also completes the official application form for easy lodgement at tax time. Both tools have been created for the current R&D Tax Concession and R&D Tax Offset programs with the new R&D Tax Credit to be covered once enacted.

To read the full Press Release by Senator Carr, click on the link below:

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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A. Blauensteiner
Australian Institute of Commercialisation

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