Australia

Details

  • Service: Tax, R&D Incentives, Environmental Incentives
  • Industry: Energy & Natural Resources
  • Type: Business and industry issue, Regulatory update
  • Date: 9/08/2013

Tax Insights

KPMG's analysis of tax issues and developments.

Alan Garcia

Alan Garcia
Partner, Tax

+61 3 9288 6094

afgarcia@kpmg.com.au

R&D Guidance papers released 

by Alan Garcia, R&D Tax Specialist

On 31 July 2013, AusIndustry released three important Research and Development (R&D) guidance papers for the manufacturing, energy and built environment sectors to assist companies undertaking R&D in those sectors to navigate the R&D tax requirements.

The guidance material released by AusIndustry utilises 14 case studies across the three selected industries to demonstrate the application and specific requirements of the R&D Tax Incentive.


Areas covered include:

  • core R&D activities which address outcomes that cannot be known or determined in advance based on current knowledge. This also impacts R&D in scale-up activities where small-scale tests may predict the outcome of large-scale tests.
  • supporting R&D activities where a direct, close and relatively immediate relationship with a core R&D activity must be demonstrated
  • the importance of describing the scientific method involving hypotheses, experiments, observation and evaluation in a commercial R&D context
  • the need for contemporaneous record keeping of activity detail and expenditure incurred
  • overseas and Advance Findings which confer certainty to R&D claimants by providing a binding determination on R&D eligibility issued by Innovation Australia
  • the issue of R&D collaboration between entities and the “on own behalf” requirement to clearly define for whose benefit the R&D activities are conducted
  • using a Research Service Provider (RSP) to access specialist R&D expertise.

AusIndustry refers to and builds on previously released guidance material that dealt with compliance readiness, specifically a five-principle approach to developing and ensuring appropriate documentation and substantiation systems for any R&D tax claim.
 

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