NOTE: T
he R&D Tax Concession program will be replaced by a new initiative:
the R&D Tax Credit from the 2010-11 income year, as announced in the Government's innovation agenda,
Powering Ideas - An Innovation Agenda for the 21st Century.
As an interim measure, prior to the commencement of the R&D Tax Credit, the R&D grouped expenditure cap for the R&D Tax concession Offset will be lifted from $1 million to $2 million for the 2009-10 income year.
R&D TAX CONCESSION OBJECTIVES
The objectives of the R&D Tax Concession are to provide a tax incentive, in the form of a deduction, to encourage R&D activities in Australia and make eligible companies more internationally competitive by:
-
encouraging the development of innovative products, processes and services;
-
increasing investment in defined R&D activities;
-
promoting technological advancement through a focus on innovation or high technical risk in defined R&D activities;
-
encouraging the use of strategic R&D planning; and
-
creating an environment that is conducive to increased commercialisation of new processes and product technologies.
R&D TAX CONCESSION ELEMENTS
The R&D Tax Concession is available to eligible companies undertaking R&D activities in Australia and offers the following four options:
Companies may also claim for R&D activities conducted overseas if these activities form part of a larger Australian project. Claims for expenditure incurred overseas is limited to a maximum of 10% of the total R&D project costs. For further information
click here.
R&D TAX CONCESSION EVALUATIONS
The 2000 evaluation found that the R&D Tax Concession remained an important influence on R&D activity for a large number of firms and was seen as more cost effective than in the past.
The 2003 evaluation concluded that the the R&D Tax Concession was appropriate and effective at achieving its goal.
The
2006 evaluation focused on the new elements introduced in 2001 (175% Premium and the R&D Offset). The evaluation found that :
Powering Ideas: An Innovation Agenda for the 21st Century
Powering Ideas picks up the recommendations of the 2008 Review of the National Innovation System,
Venturous Australia.
A number of studies and reports on R&D undertaken by, or on behalf of, the department.
How R&D Assistance Influences Company Behaviour: A Survey Investigating Behavioural Additionality Effects of the R&D Tax Concession Program
A report on how use of the R&D Tax Concession impacts on firm behaviour. The report looks at the concept of 'behavioural additionality' or the difference in firm behaviour resulting from a government intervention. The report was released in July 2007.
For further information and to view a copy of this report
, click here.
High Variation in R&D Expenditure by Australian Firms
A study based on longitudinal data of 353 R&D Tax Concession firms, who performed R&D continuously for more than ten years. The study found that most firms dramatically vary the amount they spend on R&D from year to year irrespective of firm size, industry R&D intensity, or equipment and staffing. The report was released in March 2007.
For further information and to view a copy of this report
, click here.
The R&D Tax Concession - Impact on the Firm
A study on the impact of the R&D Tax Concession on 116 firms who participated in the program. The study found that the R&D Tax Concession increases the size of investment in individual R&D projects, brings forward R&D expenditure on projects to enable faster completion with higher commercial results, and encourages investment in projects that otherwise would not be undertaken. The study was released in October 2005.
For further information and to view a copy of this report
, click here.
Absorbing Innovation by Australian Enterprises: The Role of Absorptive Capacity
A report, prepared for the Department by Mr Don Scott-Kemmis and Associates, to investigate the concept of 'absorptive capacity' and assess its importance to the National Innovation System. The report provides a comprehensive literature review, investigates Australian case studies, and reviews other countries' policies and programs in relation to 'absorptive capacity'. The report was released in 2007.
For further information on this report
, click here.
Research and Development: Evidence from Firm Interviews
A report into the factors contributing to changes in Australia's R&D effort. The report's findings are based on interviews with high R&D intensity companies. Most of the companies reported that competitive pressures and need for product differentiation to maintain a competitive edge was a main reason for undertaking R&D.
The report was released in 2005.
For further information and to view a copy of this report
click here.
Embracing Change: Case Studies on How Australian Firms Use Incremental Innovation to Support Growth
A report examining how Australian firms innovate in ways that are not related to R&D and barriers to these forms of innovation. The report was prepared for the Department by Dr Lyndal Thorburn, Advance Consulting & Evaluation and Dr John Langdale, Macquarie University as part of the Science and Innovation Mapping Study. The report was released in 2003.
For further information and to view a copy of this report,
click here.
A Study of Government R&D Expenditure by Sector and Technology
A report analysing the socioeconomic objectives of Commonwealth support for research and development across industries; research fields and technologies and the
implications for emerging areas of economic activity. The report is based on a study into Commonwealth R&D and innovation expenditure in the 1996-97 income year. The report was released in February 2000.
For further information and to view a copy of this report,
click here.
R&D TAX CONCESSION OPERATIONAL DETAILS
The R&D Tax Concession is administered jointly by I
nnovation Australia (assisted by AusIndustry) and
the Australian Taxation Office.
Detailed information on guidelines, legislation, forms for applying for and claiming the R&D Tax Concession are available from:
Facts and figures about the R&D Tax Concession and about Business Expenditure on Research and Development (BERD) are available on the R&D Tax Concession Fact Sheet and the BERD Fact Sheet.
FURTHER R&D TAX CONCESSION INFORMATION
Operational Issues
Phone: AusIndustry hotline: 13 28 46
Policy Issues
Tony Weber
Innovation Analysis Branch
RELATED R&D TAX CONCESSION LINKS
R&D TAX CREDIT LINKS