R&D Tax Allowance (RDTA)

New allowance is deductible from Chargeable Income effective YA2009 – YA2013.

It is capped at 50% of the first $300,000 of Chargeable Income.

RDTA Computation

Chageable income
Less – RDTA set off
Less – Partial Exemption
Net Chargeable Income (A)

RDTA = 50% of A
Max – $150,000

Basic guidelines of how RDTA works
1. Compute RDTA for Year 1
2. Year 1 RDTA is available for setoff against net Chargeable Income for Year 2, 3 and 4
3. Any unutilised RDTA would be “lost” after 3 years
4. The setoff amount is the lower of RDTA OR incremental R&D expenditure by company for the year.

What is “incremental” R&D expenditure?

R&D expenditure for YA2009
Less – R&D expenditure for YA2008
Incremental R&D expenditure

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s