Volume 16, Issue 1 – Sadiq

POWERING INNOVATION THROUGH TAX CONCESSIONS: THE CHANGING RESEARCH & DEVELOPMENT TAX INCENTIVES

By Kerrie Sadiq

The changes to the R&D tax concession in 2011 were touted as the biggest reform to business innovation policy in over a decade. Three years later, as part of the 2014 Federal Budget, a reduction in the concession rates was announced. While the most recent of the proposed changes are designed to align with the reduction in company tax rate, the Australian Federal Government also indicated that the gain to revenue from the reduction in the incentive scheme will be redirected by the Government to repair the Budget and fund policy priorities. The consequence is that the R&D concessions, while designed to encourage innovation, are clearly linked with the tax system.

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