On 11 May 2021, the Government announced that the Board of Taxation would undertake a review to evaluate the dual-agency administration model for the Research and Development Tax Incentive (R&DTI).
Currently, the R&DTI is jointly administered by the Australian Taxation Office (ATO) on the one side, and Industry Innovation and Science Australia (IISA) and the Department of Industry, Science, Energy and Resources (DISER) on the other — the ATO is responsible for the administration and processing of R&D tax offset claims, while IISA is responsible for registering companies’ R&D activities.
The Board of Taxation (the Board) has been tasked with evaluating the current R&DTI dual agency administration model and identifying opportunities for reducing duplication between the two administrators, simplifying administrative processes, and identifying any other opportunities to reduce compliance costs for applicants. Thus, the Board may make recommendations to modify the R&DTI’s administrative model or streamline existing administrative functions or processes, especially if it finds that taxpayers experience difficulty in understanding the different roles and responsibilities of the two administrators.
Among other things, the Board was advised to analyse R&D administration models in other similar jurisdictions (most OECD countries have some sort of R&D tax incentive) and consider how international examples could serve to guide improvements to Australia’s R&DTI dual agency delivery model.
The Board prepared a consultation guide that was the basis for review and input from stakeholders, and written submissions were being accepted by the Board up until 15 September 2021 — all submissions will be published, except where made on a confidential basis.
The Board was asked to report back to the Government by 30 November 2021, so watch this space for developments surrounding any changes to the dual-agency administration model.
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