Melbourne most attractive R&D tax environment in the world: KPMG
12 May 2010. Melbourne has topped the world in a special KPMG report on tax, ranked as the most attractive tax environment globally for R&D operations, ahead of Montreal, Sydney and Vancouver.
The report also ranked Australia first in the national R&D tax category, scoring 12.1 against the US baseline of 100 - meaning the tax burden companies face for R&D operations is around 88 per cent lower in Australia than in the US.
The report attributes Australia’s strong position in the tax rankings to its R&D tax credit system, which will come into effect on the 1st of July 2010.
Under the new broad-based system, companies with group turnover less than A$20 million will be eligible for 45 per cent refundable tax credits for R&D, with large corporations also eligible for large tax incentives.
In the report, a supplement to KPMG’s biennial study Competitive Alternatives, Australia also ranked fourth in the world overall for company tax – making it a more attractive destination for businesses to pay tax than the UK, US, Germany and Japan.
KPMG Managing Partner, Tax, Greg Wiebe, said the study reveals there is no standard approach between countries to tax policy.
"Although the types of taxes used to raise government revenues are more or less the same, there is a huge range in how these taxes are weighted and applied. A country’s tax policy choices can significantly affect the tax cost of doing business in that country," he said.
The report analysis focuses on 41 major cities with populations greater than two million from ten countries, and compares the total tax burden faced by companies, including income tax, capital tax, sales tax, property tax, miscellaneous local business taxes, and statutory labour costs.
The full report can be found by clicking here