We review behaviours of concern that result in incorrect Research and Development (R&D) tax offsets claims.
The ATO and AusIndustry (on behalf of Industry Innovation and Science Australia) jointly administer the research and development (R&D) tax incentive. The incentive aims to support companies that undertake eligible R&D activities. AusIndustry administers the registration and compliance of the R&D activities. We are responsible for the R&D expenditure claimed on the tax return.
We focus on claims:
- made by entities in particular industries
- related to particular behaviours.
Four industries of concern have been identified:
- building and construction
- software development.
Particular behaviours of concern are:
- claiming the R&D tax offset on business-as-usual expenses
- apportionment of overheads between eligible and non-eligible R&D activities
- payments to associates
- whether or not expenses have been incurred
- approaches taken by R&D consultants
- fraudulent claims
- failure to keep records.
For more information on the R&D incentives and industries, see our taxpayer alerts:
- TA 2015/3 Accessing the R&D tax incentive for ineligible broadacre farming activities
- TA 2017/2 Claiming the R&D tax incentive for construction activities
- TA 2017/3 Claiming the R&D tax incentive for the ordinary business activities
- TA 2017/4 Claiming the R&D tax incentive for agricultural activities
- TA 2017/5 Claiming the R&D tax incentive for software development activities