David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

This bill amends various taxation laws to implement a range of improvements to Australia’s tax laws.

Schedule 1 better targets access to the research and development—R&D—tax incentive to small- and medium-sized entities, which are more responsive to increasing their R&D spending as a result of government incentives.

This change will target support to companies with aggregated assessable income of less than $20 billion, with savings redirected to other government priorities, including measures from the innovation package A Plan for Australian Jobs. The change will apply to income years starting on or after 1 July 2013.

For companies that have aggregated assessable income in excess of $20 billion, the normal tax rules will apply in relation to expenditure on R&D activities.

Schedule 1 also makes a consequential amendment to the Industry Research and Development Act 1986 to ensure that the tests for eligibility of R&D activities conducted overseas continue to operate as intended in light of the changes being made to eligibility for the R&D tax incentive.

Schedule 2 establishes a scheme for making refundable tax offsets available in quarterly instalments.

From 1 January 2014, eligible small and medium companies will be able to access instalments on a quarterly basis in anticipation of claiming the 45 per cent research and development refundable tax offset at the end of the income year.

This is the first time that Australian income tax law has provided instalments of a refundable tax offset on a quarterly basis.

Providing the 45 per cent R&D refundable tax offset on a quarterly basis will improve cash flow for companies and support further investments in R&D in Australia.

Schedule 2 also includes amendments to the Industry Research and Development Act 1986 to accommodate Innovation Australia’s role in relation to the quarterly credits scheme.

Schedule 3 to this bill amends the GST law allowing taxpayers to self-assess their entitlement to a refund of overpayments of GST on objective conditions, rather than to rely on the exercise of a discretion by the Commissioner of Taxation.

The amendments provide additional clarity for entities that may have overpaid GST and are seeking to claim refunds.

The amendments also reflect the self-assessment regime in our tax laws.

Schedule 3 also addresses a gap in the existing law relating to refunds associated with miscalculations of GST payable on a supply. The amendments provide that the refund provisions apply to overpayments of GST, irrespective of whether the overpayment arises as a result of a mischaracterisation or miscalculation of the GST payable.

The amendments apply when working out net amounts for tax periods commencing on or after 17 August 2012, but only for refund claims lodged on or after the date the legislation is introduced into parliament.

Full details of the measures are contained in the explanatory memorandum.

Debate adjourned.

Leave granted for second reading debate to resume at a later hour this day.