Board of Taxation Review to Evaluate the Dual-Agency Administration Model for the Research and Development Tax Incentive

• “analyse R&D administration models in other comparative jurisdictions and consider how the international experience may inform improvements to Australia’s R&DTI dual agency delivery model;
• consult with taxpayers to obtain an insight into their experience during the registration and claiming process, including their understanding of the different roles and responsibilities of the ATO and IISA in administering the program;
• consider any new and streamlined processes undertaken by the two agencies in response to previous reviews of the scheme’s administration, such as the 2016 Review of the R&DTI and the recent Australian Small Business and Family Enterprise Ombudsman review; and
• identify the advantages and disadvantages of its recommendations, any potential financial impacts, and any trade-offs between simplification and/or reductions in compliance costs and the scheme’s integrity.”

• The compliance domains of the respective agencies are very distinct, and require differing skill sets and training:
  • ATO R&D tax assessors often require knowledge in accounting, tax and commercial law;
  • AusIndustry assessors require knowledge in science and engineering to make assessments on whether activities generate new technical knowledge, and have unknown outcomes;

• The program has been the subject of a prolonged period of actual and proposed change over the past decade. Changes impacted underlying legislation, interpretation of legislation and administrative management of the program. Following passage of the major program legislative reforms last year, a period of stability should prevail.

We further note that in our experience, we have not experienced major incidence of problems that could be presented by a dual agency model, such as: