Hi
Has anyone added in calculations for the Australian R&D Tax Incentive into the corporate tax module? Would be great to get some pointers.
I was thinking of building something similar to how the GST module works with a % of expense eligible for the R&D claim and then paid out once per year.
Thanks
Cheyne
Hi Cheyne,
This is a great suggestion and amazingly, given that Modano receives the Australian R&D Tax Incentive, we don't currently have a module which does this.
The approach you've suggested is exactly what we'd do too - i.e. refactoring a GST module given that it already contains the links in and % applicability infrastructure.
I'd also like to understand more about how this module would interact with the corporate taxation module, as we receive our incentive via reduced corporate taxation rather than an independent payment.
Keen to hear any specific details you believe are relevant to this model, as it will also need to allow for different treatments depending on whether the entity is making a taxable profit.
Please keep us posted if you start building this, I'd be happy to tap one of our team in if you start the process via this thread. Otherwise we'd need to dig a little deeper into the specifics of the accounting and tax treatment of the incentive before diving in...
M.
Thanks Michael
I'll mull this over the weekend.
However I see some key points being:
One other question mark I see is that some businesses record the Incentive as negative Tax Expense, whereas others book it as Other Income above the line.
Cheyne
Hi both,
This one actually took a while for us to wrap our heads around. We used this simple method as a starting point. I'm not 100% sure we have the expense treatment correct, but it seems okay just sense checking it. I'm sure we can get more accurate with managing the DTAs.
In our example, we kept the applicable expenditure calculation very simple, but obviously the detail will just depend on how much you want to break out the expenditure (as suggested the GST or CAC modules are all quite useful for this). We then just pass out the incentives into corporate taxation as a permanent difference, and also pass out to an other current asset mapped category to hold the receivable until receipted.
Links diagram below (probably ignore that we've passed the same link to Annual Statement, this file needs clean up):
Hope that helps.
Jun
Thanks - that was also helpful.
I've had an initial attempt but haven't had a chance to trial in detail yet. I've also stuck to the refundable offset style (as it's the most common example I deal with) and will look to add flexibility for non-refundable offset in the future.
To limit the amount of rework required on any other module I've:
Will perform some more live testing later this week.
Cheers
Cheyne