Industry Innovation and Science Australia (IISA) is the government department responsible for determining whether companies’ activities meet the legislative criteria eligible under the R&D Tax Incentive.
The 2021-22 Annual Report for IISA was recently released, and a section of the report provides an update on legal matters and litigation relevant to the department.
When comparing the 2021-22 Annual Report with corresponding reports from preceding years, a rapid decline in the number of R&D Tax Disputes arising between companies and IISA is evident:
|Year Ended||Number of Registrations||AAT Matters Resolved||AAT judgments handed down||Current AAT Matters at Year End|
|30 June 2022||12,090||10||0||12|
|30 June 2021||12,330||17||2||20|
|30 June 2020||10,544||26||4||28|
|30 June 2019||12,393||16||2||41|
The above relates to ISA matters on activity eligibility only and not R&D Tax Disputes involving the ATO.
This reduction in litigation is despite the number of registrations not materially declining.
This decline may be attributable to a combination of:
Reduction in disputes is a good outcome for both companies and the regulators, and hopefully a sign of improved health of the R&D Tax Incentive overall.
Please get in touch with our office if you would like to speak to someone about a potential R&D claim, or check out our website for more information.