[PIGMI] Activision Blizzard lobbying for new R&D tax changes

Anthony Sweet anthony at rockethands.com
Tue Mar 8 17:01:03 PST 2011 

Oh, hello late night emailer.

This:
> To my figuring, the percentages doesn't work out as cleanly as the  
> Canadian scheme (45% of 30% income tax vs. 20% of direct expediture)
is incorrect!

We really are talking about a simpler 45% of expenditure vs. 20% of  
expenditure.

When the pundits talk about their "15c in the $1", they're talking  
about the enhanced benefit, ie. 45% claimed against the 30% income tax  
rate means that your company is receiving a benefit of an additional  
15c per $1 over the 30% tax rate.

Coupled with actual refundable credits for small enterprises, that's  
significantly more generous than many other R&D schemes!


-- 
Anthony Sweet - RocketHands Pty Ltd

w: www.rockethands.com
e: anthony at rockethands.com








On 08/03/2011, at 10:15 PM, Anthony Sweet wrote:

>> > I can't imagine why they'd bother unless they thought Canda was  
>> drying up?
>
>
> The proposed credit scheme by the Australian senate is somewhat more  
> generous than the Canadian R&D credit scheme. Given then that the  
> AUD is almost equal to CAD, it comes down to where can they can get  
> the better tax credit bang for buck.
>
>
> Australia: Completely refundable 45% tax credit for companies with  
> turn-over less than $20 million. Not aware of any talk about the  
> expenditure cap (if it would exist). Based on provided information,  
> this means for a tax credit tested against very generous turn-over  
> threshold with an unlimited expenditure cap. (Sounds too good to be  
> true? Can theoretically mean an Australian company with minimal turn- 
> over could claim $100mil on R&D expenditure and walk away with ~ 
> $10mil cash in hand. Definitely facts missing from this article - I  
> haven't researched any further though.)
>
> No mention in the article on whether this applies to foreign-owned  
> companies, but that doesn't matter if US studios are looking for  
> work-for-hire contracts with R&D enabled studios.
>
> Canada: Non-refundable 20% tax credit against R&D expenditure  
> directly for foreign companies; Canadian companies receive 35% for  
> first $3mil in expenditure, 20% thereafter. Companies using the 20%  
> threshold experience no expenditure cap.  No turnover testing, but  
> the credits aren't refundable  for foreign companies (don't get cash  
> back if tax credits exceed tax debt, they can only be used to lower  
> your tax debt).
>
>
> To my figuring, the percentages doesn't work out as cleanly as the  
> Canadian scheme (45% of 30% income tax vs. 20% of direct  
> expediture), but the high turn-over limit partnered with a full  
> credit refund could be lucrative for US companies looking to engage  
> low sales/high expense R&D machines.
>
>
> It sounds highly speculative to my limited knowledge of the subject,  
> but definitely optimistic at least to have this topic coming up  
> again in our parliament. Nice to see some silver lining!
>
>
> -- 
> Anthony Sweet - RocketHands Pty Ltd
>
> w: www.rockethands.com
> e: anthony at rockethands.com
>
>
>
>
>
>
>
>
> On 08/03/2011, at 12:31 PM, Eva Tudori wrote:
>
>> Thats really interesting! In answer to your question Wez, I think  
>> WoW wasn't mentioned as Activision developed Call of Duty and the  
>> Guitar hero games before their merger with Blizzard in 2007.  
>> Activision and Blizzard still exist as different entities and  
>> Activision doesn't have anything to do with WoW development.
>>
>> Anyway, fingers crossed this comes about!
>>
>> On Tue, Mar 8, 2011 at 9:44 AM, Wesley Lamont <pigmi at raez.net> wrote:
>> Very interesting. I'm suprised they are even looking at us with the  
>> Aussie Dollar so high. There must be something else I'm missing or  
>> what they are requesting is going to be more viable than Canada/US  
>> development though you would think they would be asking those  
>> governments for a similar agreement.
>>
>> I'm amusing  that Activision/Blizzard makes no mention of Warcraft  
>> in it's list of well known games.
>>
>> WEZ!
>> On 08/03/2011, at 9:32 AM, Jetha Chan wrote:
>>
>> > My bad - didn't realise it was behind a login on the website.
>> >
>> > Try http://puu.sh/19qg for page 1 and http://puu.sh/19qh for page  
>> 2 - would've given in PDF but didn't want to embed licensing  
>> information.
>> >
>> > Jetha
>> >
>> > On 8 March 2011 09:09, Chris Kruger <chris.kruger at gmail.com> wrote:
>> > I can't imagine why they'd bother unless they thought Canda was  
>> drying up?
>> >
>> > On Tue, Mar 8, 2011 at 8:44 AM, Nick Lowe <nick at onetwenty.org>  
>> wrote:
>> > > Interesting!
>> > >
>> > > Um... does anyone have a link that's not behind a login?
>> > >
>> > > - Nick
>> > >
>> > > On Tue, 2011-03-08 at 08:37 +0800, Jetha Chan wrote:
>> > >> Anyone see this in the AFR today?
>> > >>  http://afr.com/p/business/technology/game_on_for_players_XJBsCXCaZSecRh5atAWs3O
>> > >>
>> > >>
>> > >> "The world’s biggest game studio, Activision Blizzard, which  
>> makes
>> > >> some of the industry’s best-known games, including Guitar Hero  
>> and
>> > >> Call of Duty, says it will invest tens of millions of dollars in
>> > >> Australia in coming years.
>> > >>
>> > >>
>> > >> But there’s a catch. It wants the Senate to pass proposed  
>> research and
>> > >> development tax changes."
>> > >>
>> > >>
>> > >> Worth a read - here's hoping they're met with some success.
>> > >> _______________________________________________
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>> > >
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