September 6th, 2021
The Industry Research and Development Act 1986 supports the administration of the Research and Development Tax Incentive. Two legislative instruments under the act are scheduled to sunset on 1 April 2022:
- Industry Research and Development Decision-making Principles (Decision-making Principles)
- Industry Research and Development Regulations (Regulations)
These principles and regulations contain rules around:
- Processes for lodgement of filings with AusIndustry (who administer the R&D Tax Incentive), including registration applications, overseas findings and responses to requests for information;
- The powers of AusIndustry to make findings on activities;
- The process for R&D entities in requesting extensions of time.
The department is proposing to remake both instruments in broadly the same form, and are conducting consultation around minor amendments that aim to improve the clarity of the legislation and its outcomes.
Swanson Reed has participated in this consultation, and noted that the proposed changes within the consultation are indeed minor, and related to:
- Linking the reference to government research organisations (like CSIRO) to the Australian Government Organisations Register;
- ANZSRC codes referenced in applications;
- Definition of employees for disclosure purposes in applications;
- Minor changes to the extension request mechanisms.
Interestingly, we note that there did not seem to be anything in the proposed amendments that related to the new R&D Tax Portal and its use for communication with AusIndustry. Swanson Reed supports the use of the new R&D Tax Portal and acknowledges its benefits, however we have proposed that companies still be allowed to communicate with AusIndustry on certain matters (mainly lodgement of extension requests) via email or writing in the first year of transition to the new R&D Tax Portal, since there are still technical system issues that can at times present challenges for companies setting up and linking to the new R&D Tax Portal.