The R&D tax concession allows companies to deduct qualifying expenditure at 125% (normal) or 175% (premium).

For more info about eligibility, check out the Ausindustry website.

Why?

Basically the government is trying to build up the intellectual capital of our country. This acts as a little booster for any companies who willing to do the hard yards.

How?

Since this is a government initiative and specifically the ATO is involved, there may be just a little bit of paperwork….

Its not that bad but the ATO R&D tax concession section has all you need to know.

They have even provided you with an Excel spreadsheet to calculate how much R&D expenditure you can claim in your company tax return.

From the Taxabull team.

#1 provider of Australian tax information on twitter

So, it is with interest that we see an increased level of interaction between the ATO and the mining industry.

Research & Development Tax Breaks

The Treasury is looking into redefining the types of expenditure that constitutes R&D for the mining industry. It is specifically looking at disallowing deductions for “indirect” R&D costs.

A significant part of the R&D cost for mining companies is something called “overburden” costs.

This is cost to the miners of removing waste whilst extracting the valuable raw ore. The costs may involve blasting to remove the waste material as well as returning the land to its natural state after extraction.

The mining industry is one of the major users of the R&D tax concession so it will be interesting to see how the government will weigh the tax savings generated vs. encouraging economic growth.

Its a typical short-term vs. long-term argument.

From the Taxabull team

#1 provider of Australian tax information on twitter