A long-awaited overhaul of Australia’s research and development tax break scheme will only partly mirror the recommendations from a landmark review, but observers believe universities will still benefit.
The reforms to the Research and Development Tax Incentive (RDTI), announced in the federal budget, will apply from mid-2028. Tax offsets through the premium “refundable” component of the scheme, reserved for smaller enterprises, will be increased by 4.5 percentage points to 48 per cent.
Companies will qualify for this boosted offset rate if their annual turnover does not exceed A$50 million (£27 million) a year, up from A$20 million at present. But “refundability” – the entitlement to recoup previously paid taxes if the offset exceeds one’s tax bill – will be limited to businesses established within the previous 10 years.
Incentives for larger companies will also be tweaked, with the top “non-refundable” offset rate – either 41.5 per cent or 46.5 per cent, depending on turnover – granted to organisations that channel at least 1.5 per cent of their expenditure into R&D, down from 2 per cent at present.
Businesses whose R&D expenditure falls below the 1.5 per cent threshold will attract an offset rate 8 percentage points lower.
