Tech Council warns budget R&D changes will squeeze startup tax claims
The Tech Council says removing supporting activities from eligible R&D spending will hurt startups and cost them most tax deductions.
The Tech Council of Australia gave feedback to Treasury, warning that the government's R&D tax rule changes will damage startups. Starting July 2028, the changes would exclude supporting activities from eligible R&D, including software engineering, data preparation, and testing frameworks.
One AI company estimates it would lose 70% of its tax claim. A deeptech business can't build a fabrication facility without work now classed as supporting activity.
The council wants supporting activities kept in the scheme, or the core definition expanded to include essential preparatory work.
- July 2028
- Implementation date
- 70 percent of eligible R&D expenditure
- One AI company's supporting spend
- 200 million dollars
- Expenditure ceiling
- 50 million dollars
- Turnover threshold
Why it mattersStartups and tech companies could lose substantial tax refunds. This would reduce their ability to fund early-stage research and growth.
AustraliaAustralian software, AI and deeptech companies face reduced tax incentives for innovation spending if the rules pass as drafted.
✓ Claims checked against the source and corrected before publish. checked 3 h ago
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