The Australian Taxation Office (ATO) and Department of Industry, Innovation and Science (DIIS) have released two new taxpayer alerts as a warning to those not being careful enough in their claims or seeking to deliberately exploit the Research & Development (R&D) Tax Incentive program.
The R&D tax incentive encourages companies to engage in R&D benefiting Australia, by providing a tax offset for eligible R&D activities. In 2013–14, more than 13,700 entities spent $19.5 billion on R&D, claiming a benefit of around $3 billion.
ATO Deputy Commissioner Michael Cranston said the alerts relate to particular issues identified in the building and construction industry where specifically excluded expenditure is being claimed as R&D expenses. The alerts provide clarification for a wide range of businesses who had been incorrectly claiming ordinary business activities against the R&D tax incentive.
The ATO and DIIS have developed a range of materials published online to support companies and their advisers in making sure they correctly apply for the tax incentive and maintain the right documentation to support their claim. The materials will also help businesses who may be unsure of their position, or who may make honest mistakes.
For more information on these arrangements, refer to Taxpayer Alerts: TA 2017/2 and TA 2017/3. More information about the program, eligibility criteria, and how to access the incentive is available at: Research and development tax incentive.
