The Bill introduces two proposed R&D Tax Incentive amendments:
- Removing the ability of corporate groups, with greater than A$20 billion assessable income, to claim R&D tax incentives for income years commencing after 1 July 2013.
- Introducing a quarterly instalment system, for instalment quarters starting on or after 1 January 2014, enabling company groups with less than $20m 'aggregated turnover' to access their refundable tax offset in advance, on a quarterly basis, subject to additional criteria being met.
Although the quarterly instalment system will not impact the absolute quantum of assistance obtained by smaller companies, it has the effect of accelerating payments to these smaller entities and may serve to encourage additional R&D being undertaken in Australia. This system has broadly been endorsed by both major political parties.
Currently the Bill is still before the House of Representatives, which had its last sitting day on 27 June 2013. On 27 June 2013 the Senate Selection of Bills Committee also tabled its Report No. 8 of 2013, recommending that the above Bill not be referred to a committee.
Parliament is scheduled to resume on 20 August 2013 however, as Australia is currently nearing the time of the Federal Election, it is possible the Bill will lapse if Parliament is dissolved prior to 20 August.
Former Prime Minister, Julia Gillard had previously announced an intention to issue writs and dissolve parliament on 12 August 2013, however in question time on 27 June 2013, the new Prime Minister, Kevin Rudd did not confirm the date of the election.
Accordingly there is still uncertainty as to whether the Bill will be passed by the current Parliament, or if it will lapse. The short consultation period, during which KPMG lodged two submissions, closed on 20 May 2013.