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Senate votes on R&D tax offset


The Senate has voted on proposed changes to the rate of the research and development (R&D) tax offset.

By Michael Masterman10 minute read

While agreed to by the House of Representatives, the proposed 1.5 per cent offset was opposed by the Senate, meaning the rate of the R&D tax offset will remain unchanged.

Mid-tier firm Grant Thornton said mid-size businesses, especially those in the technology, life sciences and manufacturing sectors, would welcome the news. The firm said the decision will allow these businesses to continue to receive tax incentives to innovate and remain competitive.


“This is positive news for many mid-size businesses for whom the reduction in the rate would have meant an actual cash decrease,” said Sukvinder Heyer, national head of research and development, tax, Grant Thornton Australia.

“In innovation, every dollar counts, so to have certainty that the rates will remain as they are is very welcomed.

“With the resolution of this proposal and the passing of the $100 million cap on expenditure, from a legislative perspective there are no other matters relating to R&D outstanding.”

While welcoming the Senate's response, Ms Heyer said the impact of the introduction of the cap on expenditure remains to be seen.

“This measure has the potential to push R&D offshore because the margin provided by the R&D tax offset to large companies is diminished," she said.

“This could stifle activity in the local technology, life sciences and manufacturing sectors by taking away opportunities to be involved in leading developments."

Senate votes on R&D tax offset
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