Australia

Details

  • Service: Tax, R&D Incentives
  • Type: Business and industry issue, Regulatory update
  • Date: 6/05/2013

Tax Insights

KPMG's analysis of tax issues and developments.

Alan Garcia

Alan Garcia
Partner, Tax

+61 3 9288 6094

afgarcia@kpmg.com.au

R&D in Asia Pacific – Incentives for innovation 

by Alan Garcia, ASPAC R&D Regional Lead

Decisions on where to conduct Research and Development (R&D) activities involve many factors, including the availability of resources and the relative costs of labour, materials and facilities.

R&D incentives and the impact of R&D costs on other available tax benefits may also play a key role when evaluating the after tax cost of performing R&D in one country versus another.

 

An increasing number of governments around the world are recognising the effectiveness of tax incentives to encourage investment in high-value, knowledge intensive industries and technologies. Innovation driven by high quality R&D is vital to the long-term success of almost any business and increased spending on R&D is regarded as an essential component of productivity and future economic growth.

 

Despite reduced tax revenue, many governments across ASPAC continue to support R&D activity by offering, and in some cases enhancing, R&D incentives to make their respective countries more attractive to investors.

 

Although the basic definition of R&D is similar across most ASPAC countries, there are important variations in country-specific taxation legislation and incentive regimes. Many systems offer distinctly different benefits for small and medium enterprises (SMEs) as compared to large companies. Many allow enhanced deductions and/or special tax credits for R&D costs. Tax incentives are sometimes also granted to businesses that contribute to universities and other research organisations to encourage basic research and investment in assets that are used in R&D activities.

 

Businesses that may have queries regarding existing or potential ASPAC R&D investment, please contact Alan Garcia or your current KPMG adviser to discuss further.

 

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R&D Incentives

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