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Research & Development Tax Concession – Microbreweries / Craft breweries
- By Krish Patel
- Published 2/07/2010
- Media releases
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Please note, the R&D Tax Concession will be replaced by the R&D Tax Credits program effective from 1 July 2010 (see below).
The R&D Tax Concession (R&D)
The R&D tax concession is an initiative to increase the amount of research and development (R&D) undertaken in Australia. The aim is to encourage innovative, competitive and export-oriented Australian industries.
Microbreweries reflect this aim as many undertake high levels of technical risks with alternative approaches to brewing experimentation and adaptability. For example, utilizing a new hop variety or formulating recipes for you next new seasonal release.
The R&D concession is available to all Australian incorporated companies and generally offers a tax deduction of up to 125% of expenditure incurred on R&D activities.
However, more importantly, for innovative microbrewers, particularly those in a tax loss position who cannot gain immediate benefit from the R&D Tax Concession, an opportunity exists to increase cash flow when they most need it during their initial growth phase with the R&D Tax Offset (i.e. Cash Rebate). Broadly speaking, the criteria to qualify for the R&D tax offset are as follows:
The R&D tax concession / tax offset* applications for the 2009-10 year open 1 July 2010 and close 30 April 2011. *strict criteria and qualification conditions apply.
R&D Tax Credit
The new R&D Tax Credit is a broad-based and market driven incentive package. The aim of the new R&D tax incentive is to provide ‘more generous’ benefits for eligible activities than the existing R&D tax concession (above) and is better targeted towards R&D that benefits Australia. Broadly, the R&D tax credit will be two-tiered as follows:
Contact:
Krish Patel
Moore Stephens
National R&D Practice Group Leader & Associate Director – Indirect Tax Group
02 8236 7767 or kpatel@moorestephens.com.au
PLEASE NOTE THIS IS NOT ADVICE NOT INTENDED AS SUCH BUT MERELY POINTS FOR DISCUSSION PURPOSES.
The R&D Tax Concession (R&D)
The R&D tax concession is an initiative to increase the amount of research and development (R&D) undertaken in Australia. The aim is to encourage innovative, competitive and export-oriented Australian industries.
Microbreweries reflect this aim as many undertake high levels of technical risks with alternative approaches to brewing experimentation and adaptability. For example, utilizing a new hop variety or formulating recipes for you next new seasonal release.
The R&D concession is available to all Australian incorporated companies and generally offers a tax deduction of up to 125% of expenditure incurred on R&D activities.
However, more importantly, for innovative microbrewers, particularly those in a tax loss position who cannot gain immediate benefit from the R&D Tax Concession, an opportunity exists to increase cash flow when they most need it during their initial growth phase with the R&D Tax Offset (i.e. Cash Rebate). Broadly speaking, the criteria to qualify for the R&D tax offset are as follows:
- a grouped expenditure of up to $2 million for the 2009-10 income year; and
- annual group turnover is less than $5 million.
The R&D tax concession / tax offset* applications for the 2009-10 year open 1 July 2010 and close 30 April 2011. *strict criteria and qualification conditions apply.
R&D Tax Credit
The new R&D Tax Credit is a broad-based and market driven incentive package. The aim of the new R&D tax incentive is to provide ‘more generous’ benefits for eligible activities than the existing R&D tax concession (above) and is better targeted towards R&D that benefits Australia. Broadly, the R&D tax credit will be two-tiered as follows:
- 45 per cent R&D Offset (refundable) for companies with group turnover less than $20 million, and
- 40 per cent R&D Offset (non-refundable) for companies with group turnover of greater than $20 million.
Contact:
Krish Patel
Moore Stephens
National R&D Practice Group Leader & Associate Director – Indirect Tax Group
02 8236 7767 or kpatel@moorestephens.com.au
PLEASE NOTE THIS IS NOT ADVICE NOT INTENDED AS SUCH BUT MERELY POINTS FOR DISCUSSION PURPOSES.
Contact
Krish Patel
T +61 2 8236 7700
kpatel@moorestephens.com.au
www.moorestephens.com.au
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