R&D Tax Facts – August 2024

Our R&D Tax Facts is a summary over the previous quarter of developments in the world of the R&D Tax Incentive (R&DTI) program. Detailed information can also be found on the Insights section of our website.

A recent AAT decision & the ATO’s response

See our post on an important 2024 AAT decision regarding the R&D Tax Incentive (GQHC and Commissioner of Taxation). The decision supports the view that the ATO is entitled to assess whether registered R&D activities are eligible when AusIndustry (the Department of Industry, Science and Resources) has not, or cannot, make a separate finding on the eligibility of activities.

The ATO has subsequently released a Decision impact statement in April outlining their position on the AAT’s decision. In short, the ATO has reassured taxpayers that there is no intention to change their approach to how the R&D Tax Incentive is administered.

Updated guidance released by AusIndustry

AusIndustry has recently published updated versions of two of their most commonly used R&D Tax Incentive guidance products:

- The Guide to Interpretation

- The Software-related activities and the R&D Tax Incentive guide

While the changes are relatively minor, it is important to ensure these updated materials are consulted as part of preparing a comprehensive R&D tax claim.

In addition, an updated version of the Advance and Overseas Finding (AOF) form is now available through the R&D Tax Incentive customer portal.

R&D in the news

In its latest annual report, the OECD has noted that Australia’s R&D Tax Incentives are among the most generous in the world. An article by the Accounting Times provides a helpful summary and highlights several key points on how Australia’s incentives for R&D compare with other countries.

Despite these accolades, Australia’s R&D system has been earmarked for review, with the Federal Government announcing in the 2024/25 Budget that it will undertake a strategic examination of the R&D system. Further details are yet to be provided and it’s unclear to what extent this will involve reviewing the R&D Tax Incentive program.

R&D Tax Transparency report

A reminder that this will be the first year that the ATO publishes R&D tax transparency reports. The inaugural report will cover YE 30 June 2022 and is expected to be released in September.

See: Navigating Transparency: Upcoming Publication of R&D Tax Incentive Claim Information