Assuring integrity in the R&D Tax Incentive

The R&DTI is a self-assessment program. This means you are responsible for making sure the R&D activities you register are eligible.

For an R&D activity to be eligible for the R&DTI, it must meet all parts of the legislated criteria (as defined in s355.25 and s355.30 of the Income Tax Assessment Act 1997).

The department provides guidance materials to assist you to self-assess your R&D activities, including:

• the Guide to Interpretation
• sector-specific guides
• the monthly R&D Tax Incentive Insider newsletter
• online information sessions.

You can also contact us if you need further help to understand the program.

Where we identify R&D activities that appear at risk of being ineligible, the department may conduct an examination under the Industry Research and Development Act 1986 to provide certainty about the eligibility of those activities as early as possible.

Examinations are only undertaken if we are concerned that there is a high eligibility risk.

Examinations provide assurance that tax offsets are being used for eligible R&D activities. The department does not have targets or quotas for examining R&DTI registrations.

We also undertake outreach and communication activities to inform claimants about common eligibility risks. This is to help you self-assess.

An examination is a thorough assessment of your application and records to determine the eligibility of your R&D activities.

An examinations process is about working collaboratively with you to make sure your R&D activities are eligible for the program.

The department follows principles of procedural fairness in its administration of the R&DTI, including in our approach to examinations.

We understand information provided at the time of registration is not exhaustive. If your application is selected for examination, we will work with you to ensure:

• you are given the opportunity to provide additional information and records to support your claims
• we have the information we need before making any decisions
• you are afforded opportunity to amend or vary your application (where appropriate).

Outcomes of examinations are called findings. Findings are legally binding. You cannot claim the offset for activities that have been found ineligible for the program.

An examination can take place before or after activities have been registered. We may examine current as well as previous income years.

The Australian Taxation Office (ATO) may also review your R&DTI expenditure claim. If they do, they will ask for records demonstrating that your R&D expenditure is only for eligible R&D activities.

The department works with the ATO to administer the R&DTI, and we share some information. Either agency may ask the other to conduct a review.

It is important to keep records of your R&D activities from the time you intend to start your activities to the time you make your claim. Good record keeping will help streamline an examination process.

If you are unable to provide records about your activities, we are likely to determine that you did not conduct or plan to conduct eligible R&D activities.

If we request evidence to support your application and you cannot provide it within 30 days, you can request an extension of time.

The Decision-making Principles set out the rules for extension requests. We may allow a further 14 days to provide evidence if you:

• make your request before the 30-day deadline expires
• explain why you cannot provide the evidence in time
• confirm that you can provide the evidence within the additional 14 days.

It is possible to request an additional extension of time beyond 14 days under the Decision-making Principles. We can only approve these requests in limited circumstances.

The joint R&DTI program charter outlines what you can expect when you interact with us, as well as what we ask from you. It also details the options available to you if you are not satisfied.

The charter builds on the department’s customer service charter and our R&DTI service commitment. It complements but remains separate from the ATO’s existing charter.