Federal Court Appeal Finds in Favour of ATO for Recovery of R&D Offset

March 29th, 2021

On 19 March 2021, a decision in the appeal of The Federal Court case of Commissioner of Taxation v Auctus Resources Pty Ltd [2021] FCAFC 39 was handed down.

In the preceding case, Auctus Resources Pty Ltd v Commissioner of Taxation [2020] FCA 1096, The Federal Court found that the ATO was not able to use s.8AAZN of the Tax Administration Act 1953 (a provision related to Overpayments made by the Commissioner under taxation laws)  to recover a tax refund relating to an R&D tax offset refund in the FY13.

The company’s FY13 R&D Tax Offset was deemed to be ineligible following an AusIndustry finding on Eligibility. The ATO had then used provisions under s 8AAZN, to recover the disputed FY13 R&D Tax Offset by reducing GST and fuel tax credit refunds of the company that were progressively reported.

It was reported in September 2020 that the ATO would appeal the decision in Auctus Resources Pty Ltd v Commissioner of Taxation [2020] FCA 1096.

The Federal Court appeal this month has ordered that the appeal be allowed in favour of Commissioner of Taxation, with costs.

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