2016 review of the R&D Tax Incentive

Date published:
1 April 2016

The 2016 review was informed by more than 90 submissions and consultations with leaders of business and research. The panel found that the Research and Development (R&D) Tax Incentive could do more to encourage additional research and research spillovers into other sectors.

The review panel made 6 recommendations aimed at improving the performance of the program to enable it to continue long-term.

Three of these recommendations encourage research that would otherwise not take place, known as ‘additionality’. These include providing extra incentives for businesses to hire PhD graduates and to collaborate with Australia’s world class research institutions.

The other 3 recommendations seek to strengthen the integrity and effectiveness of the program, including through reducing compliance costs for companies.

Following the review

In response to the review, the Government announced R&D Tax Incentive reforms aimed at improving the integrity and effectiveness of the program. These reforms were announced as part of the 2018–19 Federal Budget.

Legislation to support these reforms was first introduced in September 2018. The Senate Economics Legislation Committee considered the legislation and reported their findings in February 2019.

Revised legislation, the Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019, was introduced into Parliament in December 2019.

Enchanced reforms were announced in the 2020-21 Budget. These reforms supersede the 2019 Bill.