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REAL ENERGY CORPORATION – R&D Activities Found to be Ineligible Following AusIndustry Review

Real Energy Corporation Limited (ASX : RLE) have announced to the ASX that the company has received notice that AusIndustry has found the company’s R&D Activities for the FY14, FY15 and FY16 years to be ineligible.  

During the period of the last three years, Real Energy Corporation Limited has been paid around $7.2 million in R&D Incentives and potentially unpaid R&D claims of around $6.5 million.

The R&D activities related to development of gas extraction processes and in the ASX announcement, RLE indicated it will challenge the findings. The adverse finding received in this case comes amid similar adverse findings reported by Strike Energy Ltd, Moreton Resources Ltd and Northern Minerals Ltd.

This serves as another reminder that R&D Claims are subject to a high level of scrutiny and companies should ensure they follow the principles within guidance material published when assessing and registering their R&D Activities.

Companies seeking certainty around the eligibility of activities are also able to seek a finding with AusIndustry prior to claiming expenditure within their tax returns. Findings for activities conducted in the FY19 period are due by 30 June 2019.