The link to this was posted on the POH thread by jm2110 it...

The link to this was posted on the POH thread by jm2110 it applies equally to CZD as well as many other small companies I would think?

Tax credit to boost Aussie innovation
Narayan Kulkarni

Bangalore, Aug 03, 2011: Giving a push to Australia's drive to achieve innovation and new technologies, the Australian Federal Government has come up with a $1.8 billion research and development tax credit scheme. The scheme, announced on June 15, 2011, will deliver more funds to innovative firms ? including manufacturers, ICT and biotech ? increasing their productivity and Australia?s national income. With this new R&D tax incentive, Australian companies will become more innovative and globally competitive.

Announcing the incentive, Mr Kim Carr, minister of Industry, Innovation, Science and Research, in a joint statement with Mr Wayne Swan, the treasurer, said, ?The new and improved credit will target more funds to genuine R&D deserving of public support? It will deliver a 45 per cent refundable tax credit to companies with an aggregated turnover of less than $20 million and a 40 per cent non-refundable offset to all others. This will allow more firms to benefit from our massive boost to the innovation, science and research budget, helping them grasp the opportunities of our transition to a cleaner economy.?

Mr Carr said following discussions with the Greens, the Opposition party members, the government will also introduce quarterly payments for small and medium businesses from January 1, 2014. These firms will get their credit sooner, improving their cash flow and incentive to invest in R&D.

A release from the minister said the development was the culmination of an extensive consultation and negotiation process. The deferral of the start date to July 1, 2011, has an overall impact of $40 million, with a negative impact of $310 million in 2011-12 and a positive impact in 2012-13 of $270 million. The government will continue to work in partnership with the business community to get the most from this landmark reform.

Reacting to the announcement, Dr Anna Lavelle, CEO, AusBiotech (Australia?s voice on biotechnology that represents more than 3,000 members), said, ?It is the result of more than two years of advocating, consultation and working towards a good policy for innovation. However, the work is not done yet. The bill still needs to officially pass into law, and we support its passage and eagerly await the moment. The biggest winners from the tax credit will be those companies in their early stages with turnover of less than $20 million with no commercial production yet, which are able to cash out the refundable credit if in tax loss.?

Dr Esra Ogru, CEO, Phosphagenics, said, ?This is fantastic news for Phosphagenics on two fronts. Firstly, it means that for every dollar spent ? approximately $3-5 million per annum ? on research and development, the company will potentially be reimbursed a large portion of this expenditure, which can be used to accelerate our programs. Secondly, because the return will be packaged as a quarterly payment, this ensures our cash flow and liquidity is maintained and is sufficient to support our programs.?

Dr Katherine Woodthorpe , CEO, Australian Private Equity and Venture Capital Association that represents and promotes long term interests of private equity and venture capital industry in Australia, said, ?Tightening the eligibility requirements for the R&D tax concessions now means that most of the tax breaks will go to genuine R&D initiatives.?

Dr Woodthorpe said R&D was time consuming and expensive but ?essential to ongoing innovation and success in business?. ?The Australian venture capital industry funds many of the businesses that lack the capacity to obtain traditional sources of capital. This new tax measure is an important acknowledgment of the true value that innovation and genuine R&D bring to our national economy and wellbeing,? she said.

Dr Ogru pointed out that the credit was designed to stimulate spending on new techniques and technologies that are revolutionary, and rewards companies that embrace and engage in further innovation.

Dr Lavelle welcomed the news that the government, with support from the Greens, will pursue an amendment to the tax credit program to provide quarterly payments of cash refunds, instead of annual payments, as recommended in AusBiotech?s February 2010 submission in response to the ?exposure draft? of the Tax Laws Amendment (Research and Development) Bill 2010.

Besides this long pending innovation incentive initiative, in May 2011, the Australian government announced that it would invest over $13 million in new Australian inventions to turn fruitful research into commercial success. ?Turning good ideas into successful products in the market place is essential if Australia has to get full value from its scientific and research capabilities,? said Mr Carr. ?Getting a product into the marketplace requires a complex mix of technical understanding, market insight and financial resources. Through Commercialization Australia, a government initiative assisting researchers, entrepreneurs and innovative companies to convert ideas into successful commercial ventures, the government helps companies, entrepreneurs and inventors navigate these processes and take-up opportunities.??

?The new tax credit will inject significant new funds into the industry and that will stimulate new investment. They will be able to begin their clinical trials earlier, they will be able to spend more money on R&D over time and, hopefully, they will be able to get their end goal of entering the market faster than before,?? said Dr Lavelle.

AusBiotech said the legislation once passed will realize the recommendations of the 2010 Senate Inquiry that recommended that the tax credit be implemented as soon as possible, as well as the proposal in the 2011 Australian Business Foundation report by Dr Nicholas Gruen of Lateral Economics that the new R&D tax credit scheme should be passed as law. Mr Carr said, ?An advisory group will be established through the Innovation Australia Board to monitor the implementation and operation of the credit. The government, through AusIndustry, will run an extensive education program to ensure firms are kept up to date.?