On Tuesday 13 May, the Federal Government released their budget for the 2014/15 financial year and of course, there have been ‘winners’ and ‘losers’. Here are some of the key takeaways relating to R&D, innovation and medical research.
R & D Tax Incentive reduction
A reduction to both the refundable and non-refundable R&D tax offsets was announced as part of the 2014 Federal Budget.
The reductions will apply effective from 1 July 2014, and have the following effect:
- Refundable R&D tax offset – reduction from 45% to 43.5%
- Non-refundable R&D tax offset – reduction from 40% to 38.5%
These changes are being made to maintain the relative value of the R&D tax incentive in light of the proposed reduction in the corporate tax rate from 30% to 28.5% on 1 July 2014 (*effectively for companies with taxable incomes below $5 million).
For more information, please click here.
Medical Technology Innovation and Research
The Government also announced plans to establish the ‘$20 billion Medical Research Future Fund’, which would be the largest medical research fund in the world. Additional funding will be provided for a range of strategic incentives to encourage and support innovation and research.
The fund will be run by an independent Future Fund board, and will pay annual dividends worth $20 million in its initial year, growing to $1 billion by 2023.
The idea is to help boost Australia’s position as a global leader in the fields of medical technology, science and research. For more information, please click here.