The Australian Government is proposing changes to the R&D Tax Incentive to promote innovation among businesses through R&D expenditure offsets. Currently, the incentive offers a 45% refundable tax offset for entities under $20M in turnover and a 40% non-refundable offset for those over $20M. However, under the new proposal, entities with a turnover exceeding $20 billion will be ineligible, impacting 15 to 20 of Australia's largest companies.
Alongside these changes, AusIndustry has updated the R&D Tax Incentive Registration form, emphasising the need for detailed documentation of R&D activities. Applicants must now explicitly describe the new knowledge their project aims to produce, explain why outcomes couldn’t be predicted based on existing knowledge, and detail the contribution of each supporting activity. This updated form aims to ensure compliance with legislative requirements and assist businesses in self-assessing their R&D activities.
In addition to these R&D updates, the Australian government’s Export Market Development Grant (EMDG) scheme continues to support SMEs in expanding to international markets. Administered by Austrade, the EMDG reimburses up to 50% of eligible export activity expenses, capped at $150K. Eligible costs include overseas representation, marketing, travel, promotional activities, and securing IP rights overseas. To qualify, businesses must be Australian entities with an annual income not exceeding $50M and be the principal owners of the goods or services being exported. The EMDG scheme notably includes a $50K allowance for IP-related expenses if they are incurred for promotional purposes aimed at developing export markets.