AAT decision


On 21 September 2022, the AAT handed down their decision in Moreton Resources Ltd and Industry Innovation and Science Australia. The AAT published their decision on 11 November 2022.

The AAT considered whether activities registered for the R&DTI by Moreton Resources Ltd (Moreton) for the 2012, 2013 and 2014 years were supporting R&D activities for the purposes of s 355-30 of the Income Tax Assessment Act 1997 (ITAA 1997).

The AAT decided that environmental monitoring, remediation and project management activities conducted by Moreton in the 2012, 2013 and 2014 years were eligible supporting R&D activities for the R&DTI. These activities were supporting R&D activities to one or more core R&D activities Moreton conducted in 2010. The Federal Court of Australia (FCA) remitted this matter to the AAT for further hearing after Moreton successfully appealed a 2018 decision of the AAT.

The department administers the R&DTI, including managing R&DTI disputes, on behalf of IISA.

Case summary


In 2006, Moreton proposed to develop an underground coal gasification (UCG) facility near Kingaroy in Queensland.

Moreton registered core R&D activities for the R&DTI in 2010. These activities involved design, development and operation of an experimental UCG pilot plant (pilot plant) to test the viability of UCG technology. This plant was not in commercial operation. Moreton did not undertake any commercial activities as part of their pilot plant.

In March 2010, the pilot plant failed. This caused underground water contamination. The Queensland government ordered Moreton to shut it down under an Environmental Protection Order (EPO).  In July 2011, the Queensland government amended the Environmental Authority (amended EA) to limit Moreton’s activities at the site to decommissioning, rehabilitation, care and maintenance. Moreton registered R&D activities in 2012, 2013 and 2014 that related to environmental monitoring, remediation and project management.

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IISA's response


The department has considered this decision on behalf of IISA.

We will take this decision into account when we assess whether activities are supporting R&D activities for the purposes of the R&DTI. In particular, when we assess evidence in relation to activities conducted after failed core R&D activities.

We note that activities may be directly related to core R&D activities if evidence shows the activities are an inherent part of the core R&D activities from the outset and there are no other parallel commercial activities.

We will continue to assess activities on a case-by-case basis against the definitions of core R&D activities and supporting R&D activities in the ITAA 1997.

Your circumstances may appear similar to this case, but you must assess your activities against the legal requirements based on your specific circumstances.

Read the full AAT decision on Moreton Resources Ltd and Industry Innovation and Science Australia.