The R&D tax concession / R&D tax credits program is an initiative to increase the amount of research and development (R&D) undertaken in Australia. The aim is to encourage innovative, competitive and export-oriented Australian industries.

Microbreweries reflect this aim as many undertake high levels of technical risks with alternative approaches to brewing experimentation and adaptability. For example, utilising a new hop variety or formulating recipes for you next new seasonal release.

The R&D concession is available to all Australian incorporated companies and generally offers a tax deduction of up to 125% of expenditure incurred on R&D activities. Australia’s current R&D incentives regime sees R&D expenditure able to be deducted at 125 per cent of the actual amount of the expense, or 175 per cent for incremental expenditures. From 1 July will see the R&D tax concession replaced with R&D tax credits - 45 per cent refundable credits (i.e. cash rebates) for companies with group turnover for less than $20 million, and 40 per cent non-refundable credits for large corporations.

However, more importantly, for innovative microbrewers, particularly those in a tax loss position who cannot gain immediate benefit from the current R&D Tax Concession, an opportunity exists to increase cash flow when they most need it during their initial growth phase with the R&D tax offset (i.e. cash rebate). Going forward, the R&D tax offset (‘cash rebate’) will be complemented as refundable credits.

Moore Stephens would be pleased to discuss the R&D tax concession or the impact of R&D tax credits program with you further and assist you in developing strategies to maximise your R&D benefits.

Moore Stephens is a top 10 mid-tier business tax & advisory firm with a national network of eight independent firms across Australia and part of the global Moore Stephens International network.

Contact:
Krish Patel
Moore Stephens
National R&D Practice Group Leader & Associate Director – Indirect Tax Group
02 8236 7767 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it

PLEASE NOTE THIS IS NOT ADVICE NOT INTENDED AS SUCH BUT MERELY POINTS FOR DISCUSSION PURPOSES.

http://moorestephensresources.com.au/articles/373/1/Research-amp-Development-Tax-Concession--Microbreweries--Craft-breweries/Page1.html

(MB Thanks Adam Irwin, Home brewer and MB APA Challenge warrior.)