Tax concession cuts could see companies relocate R&D arms
RESEARCHERS for some of Australia's largest companies may soon be looking for more rewarding countries, after the Federal Budget cut tax concessions for major companies' research and development.
Multinational companies with an income of more than $20 billion would no longer be eligible for an R&D tax incentive of about 10% for its R&D spending.
Those with more than $20 billion in revenue, but less than that in Australia, will keep the saving.
Analysis by financial advisors Deloitte warned a number of Australia's biggest mining companies could take their research arms elsewhere.
It found some major Australian banks, telecoms and some retailers may do the same.
Deloitte Lead Partner on government incentives Serg Duchini said keeping the biggest end of town from the tax savings set an international precedent.
"There is a real concern that Australian based multinational groups will relocate their R&D activities offshore to existing sites in more favourable R&D jurisdictions," he said.
"The companies affected have the ability to choose the location of their research and development activities more readily given their resources."