📋 Tender Overview
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has called for an industry-specific RD Tax Incentive saying the current system is hampering investment and growth in the sector.In a submission to the Federal Governments Financial Technology Inquiry the Ombudsman described the RD Tax Incentive as unsuitable for software development in its current form.The RD Tax Incentive eligibility requirements need to be changed so that it is clear and simple to claim tax incentives under the existing scheme Ms Carnell says.Alternatively a dedicated software development incentive should be created to promote investment and growth in the sector.With 80 of all RDTI claims made by Australian SMEs it is clear that many small and family businesses rely on the RDTI to help fund their research and development.About half 48 of all RDTI claims come from the software development industry so a transparent and predictable system is absolutely vital to those businesses.The Ombudsmans recommendations to the government have been echoed by industry peak bodies and private tech sector heavyweights including Atlassian.We welcome submissions supporting my offices long-held position on this issue including Atlassians reported strong endorsement of an interim recommendation to clarify the existing scheme and put a time-limit on any potential clawback action.At the end of the day we want small businesses to grow into big businesses such as Atlassian and a fit-for-purpose RDTI scheme is a key support mechanism.Our RDTI report released in December 2019 found many small and family businesses were subjected to examination and audit several years after the RD was undertaken and the RDTI refund had been spent.Often these affected businesses were required by the ATO to repay the RDTI in full with a severe penalty applied.This has had a devastating impact on the businesses involved with some discontinuing or scaling down their RD efforts in Australia and reducing their RD staff.Ultimately for SMEs to continue to invest in innovation and growth it is critical they are supported in their RD endeavours.
