Taxpayer Alerts for R&D

The Commissioner has just released two taxpayer alerts that relate to the R&D Tax Incentive…

TA 2017/2 Claiming the Research and Development Tax Incentive for construction activities
TA 2017/3 Claiming the Research and Development Tax Incentive for ordinary business activities

These Taxpayer Alerts “provide a summary of our concerns about new or emerging higher risk tax or superannuation arrangements or issues that we have under risk assessment.”

So what are these concerns?

Some or all of the activities registered are broadly described and non-specific. For example, projects may be registered instead of the specific activities undertaken.

Some or all of the activities registered are ordinary business activities that are not eligible for the R&D Tax Incentive.

Some or all of the activities were undertaken in the course of their ordinary business activities and recharacterised as R&D activities at a later time.

So the concern the Commissioner has is that taxpayer’s are incorrectly claiming the R&D Tax Incentive in relation to activities that are not R&D…

So the next time an “R&D advisor” tells you that activities are R&D activities, ask them what will happen if the Commissioner concludes these activities are just “ordinary business activities”. Then read the project description they write as see if you think some or all of the activities in the description “are broadly described and non-specific.”

R&D advisors need to pick up their game or the Commissioner will start asking the Government to limit access to this incentive even more.

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About Ken Mansell

As a stay at home Dad most of the week this is my way of pretending I am still the tax counsel of ASX and SEC listed companies, working at big 4 firms, working at the Federal Treasury, on the Henry Review and at Parliament House for the previous government.
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