An AI platform to identify inauthentic social media accounts
The Client
Internet 2.0 Pty Limited (“Internet 2.0”) is a leading Australian cyber security organisation dedicated to defending clients from advanced cyber threats. Their core products include Cloaking Firewall, Malcore, and 5th Column, with a focus on building intellectual property through sophisticated intelligence consulting.
Despite working with another advisor to make R&D tax claims for their Australian activities, Internet 2.0 had not fully explored the potential for claiming R&D tax offsets for their overseas work. Of particular interest was their ongoing investment in 5th column - an AI-powered platform that uses machine learning algorithms to identify inauthentic social media accounts. Due to requirements for large datasets and specific AI expertise, Internet 2.0 was carrying out a portion of the project outside of Australia.
The Process
When assessing the eligibility of Internet 2.0’s R&D activities for an R&D tax offset, we cast the net widely and discussed the nature of both the Australian and overseas activities. Following technical discussions and review of documentation (contracts, invoices, project plans, etc.), Internet 2.0 and Intellect Labs worked to develop a clear strategy for an Overseas Finding Application.
As part of this process, Intellect Labs assisted Internet 2.0 to gather the necessary information to support the Application. This included reviewing publicly available data repositories and differentiating available datasets from Internet 2.0’s needs, as well as contacting a local University to assess availability of expertise in Australia.
After analysing the project to confirm that it met the requirements for an Overseas Finding, we prepared the initial application and submitted it to AusIndustry before the end of the income year.
The Result
AusIndustry appointed Proximity Advisory Services, a private consultancy firm, to evaluate Internet 2.0’s Overseas Finding application. The assessor’s review process was thorough and included follow-up questions to clarify uncertainties and ensure that all aspects of the application met AusIndustry’s criteria.
Internet 2.0 successfully secured a positive finding for both their Overseas and related Australian R&D activities. Following the finding, we assisted Internet 2.0 to prepare and lodge its claim for the first income year covered by the finding. This resulted in a significant tax refund that has now been released and will be used by the company to reinvest in its R&D program.
Internet 2.0 CEO David Robinson and company shareholders were thrilled with the outcome. “Engaging Intellect Labs proved to be a game changer for us. Their support has far exceeded the level of service we got from our previous advisors, and their fixed fee approach has provided us with certainty and tremendous value” David said.
Recognising the value of a formal finding for the company’s investors and future, Intellect Labs is now supporting Internet 2.0 to pursue additional Advance Finding applications as part of its R&D claim strategy.
Conclusion
Navigating the Overseas Finding process is essential for companies seeking to include their overseas R&D activities in their R&D Tax Incentive claims. Understanding the eligibility conditions, adhering to best practices, and staying informed about recent ATO concerns are crucial for success.
The case illustrates how a well-prepared Overseas Finding application can lead to significant financial support and increased investor confidence. It underscores the importance of strategic planning and thorough documentation in the R&D tax incentive process.
By learning from successful case studies like Internet 2.0’s, businesses can better manage the Overseas Finding process and secure valuable tax benefits for their innovative projects.
