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Updated guidance on R&D claims

New taxpayer alerts on incorrect R&D claims that are attracting our attention.

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We've released 2 new taxpayer alerts to warn entities and their advisers about our concerns regarding incorrect Research and Development (R&D) tax incentive arrangements we’re reviewing. These alerts are about expenditure incurred to associated entities and activities conducted overseas for foreign related entities.

We’re concerned these arrangements are being used to:

  • claim the R&D tax offset in situations where it would not otherwise be available, either at all or in the income year claimed by the R&D entity
  • artificially increase the amount of the R&D tax offset claimed.

We encourage you to read these alerts and consider if your clients need to contact us or make a voluntary disclosure by amending their R&D tax incentive claim.

Penalties may apply to participants of these types of arrangements. These penalties can be significantly reduced if the amendment request is treated as a voluntary disclosure. Generally, the reduction is greater if the disclosure is made before being notified of an examination of your client's tax affairs.

About the alerts

Taxpayer Alert TA 2023/4 Research and development activities delivered by associated entities. We’ve identified arrangements where an entity incorrectly claims the R&D tax offset for expenditure incurred under an agreement with an associated entity who conducts those activities.

Taxpayer Alert TA 2023/5 Research and development activities conducted overseas for foreign related entities outlines our concerns about arrangements where Australian entities claim the R&D tax offset for expenditure incurred on R&D activities conducted overseas. Arrangements of concern include where an R&D entity has purported that R&D activities were conducted for its own benefit, but those activities were instead conducted for a foreign entity that is ‘connected with’, or is an ‘affiliate’, of the R&D entity.

To provide information about this or another type of arrangement, or about a promoter of this or another arrangement, you can:

 

 

ATO
14 December 2023
ato.gov.au


Sam El Shammaa
George Pereira
Jane Lim
Paul Jayashekar
Christian Tanadinata
Jenny Zhou

In order to better serve you, please select the appropriate contact details for the department you are looking for below.

Department Phone Email
Financial Planning (02) 8599 0835 (Option 1) info@capitalwise.com.au
Accounting (02) 8599 0835 (Option 2) accounting@capitalwise.com.au
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