The Government has released for comment draft legislation for
the new quarterly credits payment option for the R&D Tax
Incentive refundable tax offset.
This measure is intended to improve cash flow of applicants by
making the refundable tax offset available quarterly rather than
receiving the entire offset after assessment of the income tax
return. It is intended to commence from the quarter starting 1
R&D Tax Incentive refundable tax offset is provided to
eligible companies with an annual aggregated turnover of less than
$20m. It is refundable in that it provides companies with tax
losses a refund of 45% of their eligible R&D expenditure rather
than just receiving additional tax deductions.
The quarterly offset would be paid as part of the BAS and then
reconciled against taxpayers' actual refund entitlements as
part of their annual income tax assessment.
Under the proposal a company can apply for the quarterly offset
if it meets the following tests.
The reasonable receipt test requires that it be reasonable to
expect that the entity will be entitled to the refundable tax
offset for the year.
The complying taxpayer test requires an entity to have complied
with its tax law obligations during the income year and also have
an established history of compliance with them over the previous 5
years. It must also be reasonable to expect that the entity will
continue to comply with those obligations in the future. The
Commissioner would be able to exercise discretion to allow an
entity to gain access to the quarterly offset for a year.
The complying taxpayer test includes both making lodgements and
payments on time for taxes administered by the Commissioner of
Taxation including income tax, GST and FBT. This test is extended
to related entities. The solvency of a company will be taken into
account when deciding if it is reasonable to expect that an entity
will continue to comply with those obligations in the future.
The quarterly offset would be based on 25% of the most recent
annual refundable tax offset. An entity can also vary the offset to
obtain a larger refund. However if it does vary the offset, it will
be liable for a penalty interest charge where the variation proves
to be excessive.
Comments on the draft legislation are due by 10 May 2013 and
should be sent to: General Manager, Small Business Tax Division,
The Treasury, Langton Crescent, PARKES ACT 2600; Email: firstname.lastname@example.org.
The draft legislation and explanatory memorandum can be obtained
from the Treasury website, to access please click
Exemptions or concessions on stamp duty could apply when contemplating the purchase or transfer of NSW real estate.
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