Government maintains R&D eligibility, offers more clarity on claiming
The guidelines include a list of common errors companies make when claiming the tax incentives.
Additional guidelines have today been made available to businesses looking to claim support for software activities under the Research and Development (R&D) Tax Incentive. The guidelines come after the Financial Review reported in December 2018 that a number of technology companies were being ordered to repay rebates of hundreds of thousands of dollars following an audit of previously claimed incentives.
The aim of today's new guidance is to provide "greater clarity" to businesses on the eligibility of software activities.
"The majority of software businesses are trying to do the right thing, but some are claiming the incentive incorrectly," said Minister for Industry, Science and Technology Karen Andrews.
"The Guidance does not change the eligibility of software under the R&DTI, but provides more clarity to companies around what are considered eligible software research and development activities under the program and what are not, helping them to self-assess their claims more effectively."
The guidelines include a reference document that details the restrictions of the eligibility criteria and provides information on how to make a claim and on record keeping. Another document is a guide to common errors made by companies looking to make claims. These errors include assuming that activities are automatically eligible because they follow a software development life cycle and not documenting R&D activities at the time they are conducted.
Andrews said the government is seeing a diverse range of industry sectors claiming for software, reflecting the increasing importance of software in modern business.
"The R&DTI is a vital part of the Liberal National Government's plan to increase investment and part of our commitment to fostering the innovation ecosystem," Andrews said.
"We need to ensure this investment is supporting research and development that has spillover effects for additional Australian jobs and economic growth.
Businesses can access the guidance here.