The ‘ideas boom’, aptly named by Turnbull, has been pledged to transform Australia into an innovative society with the convenient assistance of $1.1 billion federal budget. The key piece of agenda that is fuelling this ‘boom’ is the Innovation Statement, which was released yesterday in Australia. The statement outlines 24 initiatives across 11 government sectors and will cost the government $1.1 billion over the next four years.
The Innovation Statement report includes tax incentives which could provide a huge boost for our entrepreneurial ecosystem and could drive cultural change. Notable policy changes include the fact that investors in start-ups will be able to claim tax rebates of up to $200,000 a year as well as capital gain tax exemptions. Aside from tax breaks for investments, the federal government will add almost $3 billion into research facilities and science programs over the next 10 years. Moreover, the Turnbull government will offer a 20 per cent income tax rebate for retail investors (capped at $200,000 per investor per year) in order to lure everyday investors away from real estate and shares.
In relation to the R&D Tax Incentive, the Innovation Statement included no changes to the current scheme. However, it is important to note that in 2016 Innovation Australia will be replaced with Innovation and Science Australia (ISA), which will be the new body advising the Government on innovation policy. Hence, next year there may be proposed changes to the R&D tax incentive under this body. Furthermore, there is currently two surveys underway which are reviewing the R&D incentive – one by Tax White Paper and one conducted by the Centre for International Economics.However, the findings of these have not yet been finalised yet and they are suspected to be released in 2016. Hence, the results from these may impact how the government pursues the R&D Tax Incentive in 2016-2017.
Nonetheless, since the R&D Tax Incentive currently remains untouched, businesses are encouraged to engage in R&D activities as per usual. Furthermore, if you have conducted R&D in your business, you may be eligible for substantial tax savings. Contact AusGrant today to talk to a specialised R&D Tax consultant and find out if you could benefit from the scheme.