August 2002
The Australian Taxation Office (ATO) is enforcing the current legal requirement that a company is to be registered with AusIndustry for its research and development (R&D) activities before the R&D deduction (or R&D tax offset) can be taken up in its income tax return.
Although it is possible to lodge an application for registration of R&D activities for an income year up to 10 months after the end of the year, the due date for lodging the company’s income tax return needs to be taken into account as this may, in many cases, be much earlier (see “It’s tax time again” item in this issue for tax return due dates).
The requirement to register with AusIndustry before lodging the income tax return is even more crucial for the 2002 income year, as companies must also lodge with the Innovation Segment of the ATO a Research and Development Tax Concession Schedule (in addition to the tax return).
The new schedule not only requires disclosure of relevant R&D expenditure and deductions or offset, but also requires disclosure of the registration number obtained from AusIndustry following registration.
Although it may be possible to request an amended assessment to claim the R&D tax deduction if the AusIndustry registration is obtained after the company’s tax return is lodged, this is not the ideal situation.
Furthermore, for those companies which are in loss, it is not possible to choose the R&D tax offset in an amended assessment. That is to say, an R&D tax offset cannot be claimed unless a company has received notification of registration prior to lodging the company's tax return.
Claimants not yet registered should complete and lodge an Application for Registration of R&D Activities as soon as possible. Early lodgment of applications allows any questions to be resolved before the required deadlines and usually results in faster notification of registration.
For further information, please contact:
Vivian McCarron, National Leader
Research & Development, Investment & Innovation
PricewaterhouseCoopers
Phone: + [61] 2 8266 5227
vivian.mccarron@au.pwc.com
Garry Waugh, Partner
Research & Development
Phone: + [61] 7 3257 8694
garry.waugh@au.pwc.com
