On 30 March 2015, the Government released Re:think – a tax discussion paper on the Australian Tax System.
Innovation policy played an important role in the discussion, which covered grant programs to assist businesses to collaborate with researchers, build management skills and undertake early stage commercialisation activities. A major component of the Government’s existing support for innovation is the R&D tax incentive, which is now in its third year (although a R&D tax benefit of some description has been in operation since 1986).
As such, the discussion paper seeks to review the operation of the R&D tax incentive with a focus on:
The Government has posed the following question for discussion in their request for submissions:
Does the R&D tax incentive encourage companies to conduct R&D activities that would otherwise not be conducted in the absence of government support? Would alternative approaches better achieve this objective and, if so, how?
The coming discussion on innovation is likely to polarise into two opposing views:
KPMG will be preparing a submission on the importance of innovation. Contact your KPMG adviser to raise issues to be included in the submission.