Home » News » Fintech Australia Submission Discusses Application of R&D Tax Incentive to Software

Fintech Australia Submission Discusses Application of R&D Tax Incentive to Software

July 26th, 2021

InnovationAus this week has reported on concerns raised by advocacy group Fintech Australia in respect of the application of the R&D Tax Incentive to software activity.

The concerns were raised in the group’s submission to the Select Committee on Australia as a Technology and Financial Centre, and a summary of points raised include:

  • concern that regulators’ interpretations of “activities” and “experiments” under the scheme are restrictive to software claims and lead to many tech firms not accessing the incentive;
  • concern that regulators are blocking many tech firms from accessing the scheme and taking too strong an approach to audits and compliance;
  • concern that IISA does not view software development as innovative or as meeting the program’s definition of ‘R&D activities’, rather innovation and R&D activity needs to occur in a petri dish;
  • a call for the refundable R&D Tax Offset rate to be increased from 43 per cent rate to 65 per cent, and payments should be made immediately based on claims submitted for the 2020 financial year.

Swanson Reed appreciates the advocacy of Fintech Australia in respect of tech firms and the R&D Tax Incentive, however, we note that:

  • whilst there was certainly a crackdown on R&D Tax Incentive generally between 2017 and 2019 (particularly software claims) the current compliance environment has improved quite a bit, and anecdotally, compliance processes seem to be more balanced;
  • many ASX listed companies (including software developers) have announced over the past 2 years that they have been successful in appealing previous adverse R&D eligibility assessments;
  • AusIndustry announced in November 2019 that they were overhauling their compliance frameworks, which was potentially in response to the Ombudsman report;
  • AusIndustry have published guidance on the nature of software R&D Activities that are indeed eligible;
  • whilst an increase in the R&D Tax Offset rate would be lovely, it would not likely be feasible from a cost perspective. Instead, maintaining stability of the current rate should be the objective noting that R&D Offset rates have been subject to multiple cuts over the past decade.

Post a Comment

(*) indicates required field.

Are You Eligible?


Click here for the R&D Eligibility Wizard

R&D Audit Checklist


Click here for the R&D Eligibility Wizard

Categories

Archives

 
  
 Swanson Reed - Specialist R&D Tax Advisors 
 
 
 Swanson Reed - Specialist R&D Tax Advisors
  
 39 Google reviews 
 
  
 
 
 
 
  
 Swanson Reed - Specialist R&D Tax Advisors 
 
 
 Swanson Reed - Specialist R&D Tax Advisors
  
 39 Google reviews 
 
 
 
 
 
  
 
 
 
 Daniel McGregor 
 
 
 Daniel McGregor 
 
2022-08-11
 
 
  
 
I have been using Swanson Reed for my clients for more than a decade.  Having a specialist firm that can provide practical and commercial advice that produces real outcomes is very important and we have received great feedback from our clients.
Highly recommended.
  
 
 
  
 
 
 
 John 
 
 
 John 
 
2022-06-15
 
 
  
 
Damian and the rest of the team at Swanson Reed have been supporting us for several years.  We always appreciate their insights, expertise, and efforts.
  
 
 
  
 
 
 
 Rueben Rajasingam 
 
 
 Rueben Rajasingam 
 
2022-06-06
 
 
  
 
Experienced responsive Team. They have been a great help to me and my company navigate the R&D tax claim process and have provided invaluable advice.
  
 
 
  
 
 
 
 Enrique Esquivel 
 
 
 Enrique Esquivel 
 
2022-06-06
 
 
  
 
Damian and the team at Swanson Reed have been extremely helpfully and professional during all of our consultations. Highly recommended.
  
 
 
  
 
 
 
 Jess at Y&C 
 
 
 Jess at Y&C 
 
2022-06-03
 
 
  
 
  
 
 
  
 
 
 
 Anatole Kononewsky 
 
 
 Anatole Kononewsky 
 
2022-06-02
 
 
  
 
The Swanson Reed team have provided our company with exceptional professional advice and assistance for all of our R&D claims for many years - have always achieved great results with excellent value for their services.
  
 
 
  
 
 
 
 Payam Toloo 
 
 
 Payam Toloo 
 
2022-06-02
 
 
  
 
Damian Smyth and his team are very helpful, supportive and experts in their field of R&D Tax claims. I'm always happy with the work they do and been a customer of their for over 5 years.
  
 
 
  
 
 
 
 Melissa Doddy 
 
 
 Melissa Doddy 
 
2022-05-31
 
 
  
 
The Team at Swanson Reed are very experienced R&D Tax Advisors and gave us ongoing support with all of our R&D Claims, the consultants ensured we were always working with current legislative guidelines, gave us assistance with compiling technical and government documentation and went out their way to ensure they were with us for the entire process from beginning to end.  Highly recommended to anyone who needs assistance with working through what can at times be a daunting process.
  
 
 
  
 
 
 
 Gary Watson 
 
 
 Gary Watson 
 
2022-05-31
 
 
  
 
We can highly recommend Swanson and Reed as an R & D accountant. We have worked with them for several years now as they make our R & D claim so easy and communicate quickly with both us and our accountant.
  
 
 
  
 
 
 
 Rob van den Bergh 
 
 
 Rob van den Bergh 
 
2022-05-31
 
 
  
 
Always professional.