Glasshouse Advisory’s R&D Tax and EMDG practices have transferred to leading independent assurance, tax and advisory firm, Grant Thornton.
The Senate Economics Legislation Committee has recommended that the proposed changes to the R&D tax incentive be sent back to the House of Representatives, highlighting the need for further refinement. This marks the end of a four-month inquiry, involving 75 written submissions and multiple public hearings with representation from both the public and private sectors.
The report’s findings emphasise two main areas of concern: the retrospective application of the proposed changes and the inequality generated by the implementation of the R&D intensity formula. In particular, the proposed intensity formula unfairly undermines the ability of businesses with high operating costs to access incentives under the R&D program.
These findings reflect the key issues raised by Glasshouse in our written submissions to the Committee as part of the consultative process.
The report did find that industry, the public sector and government agreed that the R&D tax incentive could be better targeted to increase R&D additionality and spillover benefits to the wider economy. While this means change to the program is still likely, limited parliamentary sitting days mean that it is now extremely unlikely that the bill will be passed before the impending Federal election.
While the report marks a win for Australian innovation, significant progress is still needed to reign in uncertainty around the future of the program and its ability to support Australian innovation.
If you would like to discuss the report or the R&D tax program, you can contact one of our experts.
Contributing authors: Matt McLean and Amy Jackson