Compliance focus
We're focused on ensuring the integrity of the research and development tax incentive (R&DTI) program. We work closely with the Department of Industry, Science and Resources (DISR), on behalf of Industry Innovation and Science (IISA), to jointly administer the program.
The ATO and DISR regularly conduct compliance reviews and audits of R&D companies registered R&D activities and claims to ensure the ongoing integrity of the R&DTI program. While it is a self-assessment program, we have sophisticated systems in place to identify non-compliance. This includes a focus on larger businesses and high-expenditure claims, as well as those claims brought into focus through our risk-based approaches, including possible fraudulent claims.
In line with our general compliance approach for the tax and superannuation systems, we focus on making it easy for people to comply and hard for them not to.
R&D company engagement
In continuing to ensure R&D companies get it right, we regularly engage with them through information sessions, emails, the publication of taxpayer alerts, updated web content and news articles related to the program.
We have published 2 Taxpayer Alerts – TA 2023/4 Research and development activities delivered by associated entities and TA 2023/5 Research and development activities conducted overseas for foreign related entities to warn companies and advisers about our concerns regarding incorrect R&DTI arrangements which were used to:
- claim the R&D tax offset in situations where it would not otherwise be available
- artificially increase the amount of the R&D tax offset claimed.
We encourage R&D companies and their advisers to read any of our new material or guidance and consider if they need to contact us or make a voluntary disclosure by amending their R&DTI claim.
Our specific compliance approaches across the entire R&D population include:
- risk-based R&D claim reviews
- focussing on anyone, including tax agents, who may be promoting arrangements to access the R&DTI to those who would be ineligible. We have information to help you get R&D claims right which includes details about promoter penalty laws
- the general anti-avoidance rule of Part IVA of the Income Tax Assessment Act 1936 now includes R&D tax offsets as a tax benefit for Part IVA from 1 July 2021.
For assurance that large corporations are complying with the R&DTI program, we engage with them through the following programs:
We focus on assuring the tax compliance of corporate populations. More information on how we engage with them through our population programs is at Tax Avoidance Taskforce.
Due to strict taxpayer privacy and secrecy information laws, the Report of data about research and development tax incentive entities 2022–23 does not contain any information regarding our compliance activities.