Under the amendments to the R&D Tax Incentive commencing for FY22, there was no change to the definition of eligible R&D activities and R&D expenditure. However there was a significant change to the clawback mechanisms, among other changes to offset calculations and administrative processes.
The FY22 changes for Clawback Adjustment processes were particularly complex.
The three types of clawback events provided for within the R&D Tax Incentive include:
Prior to the FY22 amendments, mechanisms for each type of clawback event were accounted for differently within a company’s tax return. From FY22 onwards, a new ‘uniform clawback’ mechanism applies whereby a total amount of assessable income from Clawback Adjustments is determined and reported at Part B, Item 9 of the new ATO R&D Tax Incentive Schedule.
A recent ATO guidance document titled ‘Clawback of the R&D Tax Offset’ published on the ATO Website in November 2022, which supplemented the R&D Tax Incentive Schedule instructions published before July 2022.
Swanson Reed has collated a presentation on the new clawback guidance, and this will be available on our website in coming weeks.