A feature article authored by Swanson Reed is included in June 2024 volume of the Taxation in Australia.
Swanson Reed’s article covers the recent R&D tax incentive taxpayer alerts released in December 2023 (TA 2023/4 and TA 2023/5).
These alerts primarily relate to whether entities registering R&D activities and claiming R&D tax offsets can be shown to be the entity for whom the registered R&D activities are conducted, as required by law.
TA 2023/4 and TA 2023/5 indicate that the ATO will be more frequently scrutinising the legal substance and form of issues around control, financial risk and ownership of the results arising from R&D activities. The alerts will require R&D Entities and Advisors to look beyond whether, merely on face value, R&D activities are being conducted, or whether R&D expenditure is being incurred within a group of entities.
Instead, the specific registering R&D entity (and not just the broader group) must be assessed to ensure that it is the entity that is legally entitled as the R&D Claimant. This requires careful consideration of the legal and commercial relationships between entities within multi-entity and multi-jurisdiction groups.
Taxation in Australia is continually ranked as Australia’s leading tax journal and is published 11 times per year, available exclusively to members of The Tax Institute.
Please get in touch with our office if you require assistance, would like to speak to someone about a potential claim, or check out our website for more information.