AAMRI Submission on the R&D Tax Incentive

AAMRI Submission on the R&D Tax Incentive

28th October, 2016

The Australian Government asked Bill Ferris AC (Chair of Innovation Australia), Dr Alan Finkel AO (Australia’s Chief Scientist), and John Fraser (Secretary to the Treasury) to undertake a review of the R&D Tax Incentive, with findings of this review released on 28 September 2016. The Minister for Industry, Innovation and Science then announced a public consultation on the review findings, and called for sector feedback.

In its submission AAMRI expresses its support for:

  • retaining the current definition of eligible activities and expenses
  • the development of plain English summaries, case studies and public rulings to assist those using the programme
  • the proposal for a 20 percent collaboration premium for the collaborative element of expenditures undertaken with Publicly-Funded Research Organisations (PFROs — including medical research institutes)
  • the publication of the names and companies claiming the R&D Tax Incentive and the amounts of R&D expenditure claimed.

AAMRI recommends:

  • that any cap in the order of $2 million on the annual cash refund payable under the R&D Tax Incentive should not be applied where companies are pursuing the commercialisation of health and medical research
  • that if an intensity threshold of 1-2 percent is introduced those companies that exceed the threshold should be able to receive the non-refundable component for all of their R&D expenditure, and not just the expenditure that exceeds the threshold
  • further modelling be undertaken and made available to assess the likely combined impact of recommendations four and five of the review.