Home » News » Federal court matter (December 2024) declares that respondent was a promoter of a tax exploitation scheme to secure R&D Tax Offset.

Federal court matter (December 2024) declares that respondent was a promoter of a tax exploitation scheme to secure R&D Tax Offset.

A federal court case with judgement dated 16 December 2024 (with The Commissioner of Taxation as the Applicant and a number of parties as Respondents) has declared that respondents were promoters of tax exploitation schemes to secure R&D tax offsets pursuant to Division 355 of the Income Tax Assessment Act 1997 (Cth) for a number of companies.

Very large penalties have been levied in the case and the liquidations of two entities listed as respondents were noted in the judgement as being on hold pending the outcome of the proceeding.

The R&D Tax Incentive has been a focus of the TPB and ATO over recent years, with several published matters involving concern over R&D Tax Advisory services.

The substantial penalties levelled act as a significant deterrence to advisors seeking to misuse the benefits available under the R&D Tax Incentive. The case also serves as a reminder for companies and their tax agents to:

• Procure R&D Tax Advisory services from a reputable advisor;
• Ensure the advisor is fully transparent in respect of:

o    The basis for R&D expenditure calculations;

o    Working papers and details of key positions, such as any apportionment methods where relevant;

o    The relevant guidance published by AusIndustry and ATO that was applied as a basis for the claim.

For more information, click here.

Swanson Reed supports any measures that maintain the integrity of the R&D Tax Incentive and the profession.

Please get in touch with our office if you require assistance, would like to speak to someone about a potential claim, or check out our website for more information.