• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/2/2013

Australia - R&D legislative proposals; substantiating R&D claims 

July 2: A bill introduced 26 June 2013 by the Australian government proposes research and development (R&D) tax incentive changes. The proposed R&D measures would:
  • Repeal R&D tax incentives for corporate groups with assessable income greater than $20 billion* (approximately U.S. $18.3 billion)
  • Introduce a quarterly installment system, to allow company groups with less than $20 million "aggregated turnover" to access their refundable tax offset in advance, on a quarterly basis

*$=Australian dollar

Read a July 2013 report prepared by the KPMG member firm in Australia: R&D Tax Incentive: Update on Bill before Parliament

R&D recordkeeping, substantiation

The Australian Administrative Appeals Tribunal, in a case concerning the R&D tax offset claimed by a taxpayer regarding its project to develop beverage purifier devices, agreed with the tax authorities that the taxpayer had not established or demonstrated the required nexus between the R&D activities and the expenditure. Ozone Manufacturing Pty Ltd v Commissioner of Taxation [2013] AATA 420

This decision—the latest in a series of tribunal cases relating to R&D claims—provides guidance on the nature and extent of recordkeeping expected to satisfy the R&D claims. The taxpayer has the burden of demonstrating that claimed activities are experimental in nature and are not "business as usual."

Read a June 2013 report prepared by the KPMG member firm in Australia: Substantiating R&D claims

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