Ask a question from expert

Ask now

Assignment - Australian Taxation Law

12 Pages2594 Words97 Views
   

Added on  2020-05-16

Assignment - Australian Taxation Law

   Added on 2020-05-16

BookmarkShareRelated Documents
Running head: AUSTRALIAN TAXATION LAWAustralian Taxation lawName of the Student:Name of the University:Authors Note:
Assignment - Australian Taxation Law_1
1AUSTRALIAN TAXATION LAWTable of ContentsIntroduction:...............................................................................................................................2Definition of research and development:...................................................................................3Tax Incentives for small businesses:..........................................................................................3Implication of the Tax incentives to small business:.................................................................4Taxation law’s provisions:.........................................................................................................5Significant Taxation Rules:........................................................................................................5Conclusion:................................................................................................................................8References list:...........................................................................................................................9
Assignment - Australian Taxation Law_2
2AUSTRALIAN TAXATION LAWIntroduction:In the modern era with the changing tastes and demand of consumers, businessentities are required to find out innovative ways that will help them in improving productionprocess and quality of product. Organizations often engage in research and developmentactivities for coming up with new techniques and innovative ways that will help them tocomply with the changing requirements. Businesses are able to stay ahead of theircompetitors and differentiate them with others with the evolvement of development activities.Companies engaging in activities of research and development not only benefit themselvesbut also provide advantages to society (Robin 2017). It can be explained with the help of anexample, if the automobile manufacturing companies make the development of automobilesthat consumes electricity rather than petrol, and then it will help in reducing the fossils fuelsconsumption that is a non-renewable source and is getting dwindling faster. Nonetheless,development of such advanced technique will involve huge costs and will require entities toinvest considerable amount of capital. Promotion of such developmental activities undertaken by research and developmentdepartment of respective entities can be done by providing them incentives in the form oftaxation (Graetz 2016). Tax incentives are provided to companies in respect of theexpenditures that are incurred by them for undertaking development and research activities.Tax incentives documentation gives detail about various tax incentives that will be receivedby organization and demonstrates by the conditions and statutes that should be fulfilled byentities such as small business for availing the same (ato.gov.au 2018).
Assignment - Australian Taxation Law_3
3AUSTRALIAN TAXATION LAWDefinition of research and development:Research and development refers to all such activities that are undertaken by companyfor the acquisition of new knowledge that will help them in innovating their products. Suchactivities require organization to make investments in advanced technologies and make usesystem, process and technology. The current capacity utilization of company is utilized inbest forms with the help of research activities that help them in delivering best to customersand serving society at the same time. Tax Incentives for small businesses: The concession given to small business in reference to their research and developmentactivities starting before 1st July, percentage stands at 125%. In some other circumstance, thepercentage of tax incentives received by organization can exceed 175% (ato.gov.au 2018).For the purpose of motivating and encouraging companies to involve in the research anddevelopment activities, various tax incentives are provided as per statues. Companies areencouraged to undertake research and development activities if they are provided with theincentives relating to taxation. Tax incentives for research and development involve twocomponents and this includes a refundable tax offsets and non-refundable tax offsets(Barkoczy 2016). The two components of tax incentives are listed below and are as follows:A non refundable tax offset of 38.5% to all eligible entitiesFor some certain eligible entities, taxation authority provides a refundable tax offsetof 43.5% and the turnover of company should not be more than 20 million (ato.gov.au2018). Statue has reduced the tax offset on research and development activities undertaken bycompany to 30% and the rate has been effective from 1st July 2004 and will remain till 1st July2024 (ato.gov.au 2018).
Assignment - Australian Taxation Law_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
The Research and Development Tax Incentives
|10
|2766
|292

Research and Development Tax Incentive in Australia
|14
|3614
|137

BLO2206 Taxation Law Assignment- Tax Incentive
|12
|2935
|34

Tax Implications of the Incentives
|11
|2812
|31

Taxation Law ITAA 1997 - PDF
|11
|2737
|54

Tax Implications of R&D Incentives in Small Businesses
|10
|2826
|267