The bigger package around the RDTI

The R&D Tax Incentive redesign isn't a standalone measure. The 2026–27 Budget frames it as part of over $3.5 billion in new measures that lower taxes for businesses, with savings from the RDTI changes helping fund the rest. For companies that do R&D, several of these measures interact — so it's worth seeing them together.

The measures and their start dates

MeasureWhat it doesStarts
**$20,000 instant asset write-off**Made **permanent**; immediate deduction of eligible assets under $20,000 for businesses with turnover under $10M**1 July 2026**
**Two-year loss carry back**Permanent; companies up to **$1B turnover** can refund tax paid in the prior two years against current-year losses (~85,000 companies)**1 July 2026**
**Venture capital incentives**Expanded to reflect modern company valuations; larger amounts over a longer period**1 July 2027**
**Start-up loss refundability**New businesses in their first two years can refund tax losses, capped to PAYG withholding and FBT on wages**1 July 2028**
**R&D Tax Incentive redesign**Higher core offset, supporting expenditure removed, intensity threshold 1.5%, refundable to firms under 10 years**1 July 2028**

Sources: Backing Small Business factsheet (pp. 1, 3–4); Productivity Package factsheet (p. 2).

Why it matters for R&D companies

R&D-intensive companies are frequently loss-making while they invest — which is exactly where several of these measures are aimed:

  • Loss carry back and start-up loss refundability target the cash-flow problem of investing ahead of profit.
  • Expanded venture capital incentives target the funding side of the same firms.
  • The RDTI redesign steers the higher, refundable offset toward firms operating under ten years with turnover up to $50 million.

The Budget estimates the RDTI changes will unlock 20 per cent more business R&D for each dollar of tax offset and a further $400 million in R&D investment by young firms each year. (Productivity Package factsheet, p. 2)

What to keep in mind

  • Different start dates. The write-off and loss carry back begin 1 July 2026; venture capital from 1 July 2027; start-up loss refundability and the RDTI redesign from 1 July 2028.
  • Mostly unlegislated. Several of these are announced Budget measures, not yet law, and detail can change.
  • The RDTI still rests on documentation. None of the surrounding measures change the fundamental requirement to substantiate an R&D claim with records made at the time the work happens.

This article is general information, not tax advice. The interaction of these measures for a specific company depends on its circumstances — confirm with a registered tax or R&D adviser.

Sources