Pure Hydrogen Corporation Provides Update on Settlement of Dispute to Repay R&D Tax Refund

June 27th, 2022

As previously reported, Real Energy Ltd was involved in a dispute with R&D Tax Incentive programme regulators over the eligibility of its R&D activities spanning a number of years.

Corporate activity between Real Energy and Strata-X has since merged to form Pure Hydrogen Corporation Ltd.

Pure Hydrogen Corporation on the 23rd of June provided the following update on the dispute:

  • The matter was taken to the Administrative Appeals Tribunal over 3 years ago and now the parties have consented to orders whereby Real Energy’s R&D tax incentive claims for the financial years ended 30 June 2014, 2015, 2016, 2017, 2018 and 2019 have been upheld and the adverse finding of ISA have been set aside;
  • Real Energy is no longer required to repay any R&D tax incentive refunds and there is no income tax liability for past years;
  • Pure Hydrogen will have turnaround of approximately $13.1M – it will no longer liable for a claim from the ATO of $7.2M to repay R&D tax incentive refunds and instead be entitled to a refund estimated at $5.9M;

The above is a good outcome for Pure Hydrogen Corporation, considering that when companies’ activities reach the stage of a negative finding and AAT dispute, compliance proceedings can be difficult to settle or overturn.

The settlement also follows positive (or partially positive) R&D tax dispute settlements reached by Argent Minerals (ASX: ARD), Strike Energy (ASX:STX) and Northern Minerals (ASX: NTU) over the past couple of years.

Whilst this is a good outcome, resolving matters through AAT and the courts is costly and resource intensive. This is a reminder that R&D claims must be compiled and assessed with care, and that claimants should carefully adhere to R&D tax compliance guidance published by AusIndustry and the ATO.

Contact our office for more information regarding R&D tax compliance or for help with your R&D Tax Incentive application.


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