• Service: Tax, R&D Incentives
  • Type: Regulatory update
  • Date: 3/04/2014

Tax Insights

KPMG's analysis of tax issues and developments.

Gareth Newport

Gareth Newport
Director, Tax

+61 3 9288 5011

An eventful month for the R&D Tax Incentive 

by Gareth Newport, R&D Incentives Specialist

March 2014 saw numerous developments relating to the Research and Development (R&D) Tax Incentive in Australia with new cases and guidance published. The potential for further legislative change is still on the horizon.

New guidance documents published by AusIndustry:

  • specific guidance for large R&D Tax Incentive claimants, outlining how AusIndustry approaches and manages compliance risks for large businesses
  • 'the R&D Tax Incentive: A Short Guide to Interpretation' sets out how AusIndustry interprets the key elements of the definition of ‘R&D activities’. It is designed to assist companies understand and assess whether their work is eligible

Proposed exclusion for certain large companies:

The proposed amendment changing the R&D Tax Incentive to exclude companies exceeding $20 billion aggregate assessable income will be introduced to the Senate having received positive endorsement from a Senate Economics Committee. The Committee made minor recommendations, which are currently being considered.

Read KPMG's submission as part of this process

Administrative Appeal Tribunal (AAT) update:

The AAT has issued a decision limiting expenditure claimable under the previous R&D Tax Concession program for a particular taxpayer. The primary issue considered related to whether the expenditure claimed was 'directly in respect of' eligible R&D activities.

Additional considerations included the eligibility of plant, overseas and marketing/sales expenditure.


Whilst the case relates to the earlier tax concession program, it still provides useful insight into the current issues and interpretation by the AAT.

KPMG Commentary

The R&D tax incentive has been operational for two years with increasing information to consider on how the program is administered. 

Further information and guidance is expected so keep your eyes on DTN for updates, or contact your KPMG professional.


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