Home » News » New ATO Clawback of R&D Tax Offset Guidance Published

New ATO Clawback of R&D Tax Offset Guidance Published

February 6th, 2023

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:

  1. A feedstock adjustment is triggered when a company generates sales from input costs for which a company has claimed a R&D tax offset;
  2. Receipt of a grant or recoupment from an Australian government agency for expenditure a company has claimed as an R&D tax offset;
  3. An assessable balancing adjustment for disposal of an asset upon which the tax depreciation is claimed as an R&D tax offset.

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.

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

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