The R&D Tax Incentive is a self-assessment programme, which means you are responsible for making sure you meet the eligibility criteria for the programme. Your application to register your R&D activities will generally be accepted at face value. However the department regularly reviews registrations to ensure registrants understand and comply with the eligibility requirements of the programme.
The department may review your registration either prior to or after your R&D activities are registered. It’s important to understand the department’s review activities so you are ready if your registration is chosen for a review.
It’s important to note that these reviews do not formally determine your company’s eligibility for the R&D Tax Incentive registration.
The department may review your registration at any of the following review stages:
In a Pre-Registration Review, your application for registration is analysed against possible indicators of non-compliance risk by the department. The department may or may not contact you during this process.
If you are selected for an Education Visit, a Customer Service Manager (CSM) will meet with you and provide guidance and education information to help you with the requirements of the programme and improve your opportunity for compliance.
If you receive an Education Letter, a CSM will provide suggestions for you based on your most recent registration application. These suggestions can help you when completing future registrations.
In a Registration Review, your registration (or registrations) is analysed against the eligibility criteria of the programme. You generally will not be contacted during a Registration Review. However it can lead to further review activities.
If a Registration Review does not satisfactorily resolve outstanding risks identified in your registration, a Desk Review will be undertaken. This process involves a deeper analysis of your registered activities. The department will contact you to clarify information you have provided in your registration. You will be asked to provide the supporting contemporaneous documentary evidence you used to self-assess your eligibility.
The aim of an Activity Review is to obtain a thorough understanding of your registered R&D activities and to address any outstanding issues identified during the Registration and Desk Review stages. An Activity Review will generally include a site visit to your company to speak with R&D staff about their work, and to view your projects and project records.
The examination of your registration during the risk review stages may lead to a Post-Registration Finding about the eligibility of all or some of your registered activities. Findings enable Innovation and Science Australia (the statutory authority responsible for administering the programme) and its delegates to determine if activities in your specific circumstances are eligible for the R&D Tax Incentive.
You cannot claim an offset for activities found to be ineligible. If you have already made a claim in your tax return and the activity is found to be ineligible, you will need to amend your tax return accordingly. Penalties may also apply if you have incorrectly claimed the R&D Tax Incentive.
If you disagree with a Post-Registration Finding, you can apply for an Internal Review of the decision. An Internal Review will confirm, vary or set aside the original Finding. If you disagree with an Internal Review decision, you can apply to the Administrative Appeals Tribunal (AAT) for a further review of that decision. The AAT can provide an independent review of decisions made by the Australian Government.
- Compliance Readiness – risk reviews and findings provides further detail on the department’s reviews of registrations, including details on the potential outcomes from these review processes.
- Have a look at a selection of recent AAT decisions concerning the R&D Tax Incentive.
- If you want to determine the eligibility of your R&D activities under the R&D Tax Incentive before applying, you can apply for Advance or Overseas Findings. These findings will provide you with a certainty of whether your R&D activities are eligible under the programme.