2015-16 Registration deadline is 1 May 2017
Registrations for the R&D Tax Incentive are closing soon! Registration is a critical step when accessing the R&D Tax Incentive. Companies must register their R&D activities with AusIndustry before they are able to claim the benefits of the R&D Tax Incentive.
The deadline to apply for registration is 10 months after the end of a company's income year. Companies with a standard income period of 1 July 2015 to 30 June 2016 must lodge their registrations with AusIndustry by Monday 1 May 2017 (as 30 April is not a business day).
AusIndustry receives many applications close to the deadline which can cause processing delays. To avoid hold-ups, submit registrations well before the deadline.
Eligibility under the R&D Tax Incentive is based on activities, not projects. All registered activities must be self-assessed as eligible activities in accordance with the legislation. Documentation must be kept to support eligibility, should the registration be selected for a compliance review.
The registration of activities does not guarantee that the activities described in the registration are eligible core or supporting R&D activities. Registration is not an acknowledgement of compliance with the requirements of the R&D Tax Incentive.
Determining the eligibility of activities is the responsibility of the R&D entity. To participate in the R&D Tax Incentive, companies must assess the eligibility of their activities against the criteria themselves. Self-assessment means that companies:
- are careful, honest and accurate in their assessment of their eligibility, and the information they provide to both the Australian Taxation Office (ATO) and AusIndustry
- keep the evidence generated at the time the activities were conducted and that the company relied on to assess eligibility.
Using the services of a tax agent or R&D consultant to assist with the preparation of a registration application does not guarantee eligibility. Tax agents and R&D consultants are private businesses that provide services to companies on a commercial basis. AusIndustry does not certify tax agents or R&D consultants and does not automatically accept the eligibility of activities assessed by them.
Companies registering are responsible for the eligibility of their registered activities. AusIndustry may examine an application for registration in detail before it is registered or afterwards. This may lead to a formal finding about the eligibility of all or some of the registered activities. Companies may be contacted to discuss their registration and be asked to provide evidence they relied on when making the self-assessment of eligibility.
Companies may wish to review the examples of eligible activities on business.gov.au before lodging their applications for registration.
The ATO may review the eligibility of expenditure being attributed to registered activities.
The due date for lodging an application to register activities is a firm deadline. Companies that are not able to lodge their applications before the deadline may contact AusIndustry and request an extension. If a request is received before the deadline, Innovation and Science Australia (the Board) will provide a further period of 14 days to register.
If an application for registration is received after the deadline and an extension was not requested before the deadline, the registration will not normally be accepted. Under this circumstance, the Board may only grant an extension if the reason for the late lodgment was not the fault of the company (this includes the company's agents and advisors) and not within its control.
If there were reasons that caused the company to miss the deadline that were beyond its control, the company must submit a written request for an extension of time. The request must explain why the extension is needed and include supporting evidence. AusIndustry will ask for further documentation to support the request if it is needed.
Section 27D of the Industry Research and Development Act 1986(Act) and the Industry Research and Development Decision-making Principles 2011 (Principles part 3) describe the circumstances in which the Board may allow an extension of the application deadline.
Taxpayer alerts - review your registration application
When preparing registration applications, it is important for companies and tax advisors to ensure their self-assessment of eligible R&D and expenditure meets legal requirements.
The Department of Industry, Innovation and Science (the department) and the Australian Taxation Office have jointly issued four taxpayer alerts recently:
- TA 2017/2 - Claiming the Research and Development Tax Incentive for construction activities
- TA 2017/3 - Claiming the Research and Development Tax Incentive for ordinary business activities
- TA 2017/4 - Claiming the Research and Development Tax Incentive for agricultural activities
- TA 2017/5 - Claiming the Research and Development Tax Incentive for software development activities
- TA 2017/5A - Addendum
An earlier taxpayer alert was issued in 2015 (2015/3 - Accessing the R&D Tax Incentive for ineligible broad-acre farming activities).
The taxpayer alerts highlight common claiming mistakes and provide clear advice about the requirements of the law in these areas.
With the registration deadline fast approaching for many companies, this is a reminder to review your registration to ensure that you are correctly self-assessing the eligibility of your activities and the associated expenditure. Along with the taxpayer alerts, the department has also published a range of guidance material in these specific areas of concern to help companies self-assess their eligibility.
Sector guidance material refresh
In February, we asked for people interested in helping improve some of the sector guidance material we provide. Thank you to everyone who nominated their interest, we look forward to working with you to assist in providing clear, concise and relevant information. We are working through our research approach and plan to get in contact with people interested in helping us in the next few weeks. There is still time to register your interest, by emailing firstname.lastname@example.org.
Coming soon: a better R&D Tax Incentive web presence!
Keep an eye out after 1 May 2017 for improved R&D Tax Incentive content on business.gov.au!
The improvements include a new layout to help you find the information you need more easily.
We think you'll enjoy the improvements. Why? Because we have been testing prototypes with the users of the programme - companies and tax advisors - and asking what they thought. We used their feedback to make further improvements.
This update won't be the last, we are always looking at ways we can improve our service offering.
Don't worry, we'll let you know when it all happens, just look out for your R&D Tax Incentive Information Bulletin.