How we check R&D Tax Incentive compliance

When we monitor and review applications our priority is to help you to get it right. You're responsible for making sure the activities you register meet the eligibility criteria.

To help you do this we've developed useful resources and guides to assist you in self-assessing your R&D activities. You can also contact us if you need further help to understand the program.

Compliance reviews are regularly conducted to check whether eligible R&D is claimed. We don't have targets or quotas for assessing R&D Tax Incentive applications and registrations.

We conduct eligibility reviews and more detailed assessments both before and after you've registered. The detailed assessments are called examinations. We may examine current as well as previous income years.

Where there are concerns about eligibility, we will inform you of our review. You'll then have the opportunity to address any issues.

The Australian Taxation Office (ATO) may review your R&D Tax Incentive expenditure claim. If they do, they will request evidence that your R&D expenditure is only for eligible R&D activities.

We closely work with the ATO to administer the R&D Tax Incentive. Either agency may ask the other agency to conduct a review.

We may examine your application or registration if we detect significant eligibility issues during our compliance review. If we do we'll ask you to provide records to show that your activities are eligible R&D.

We'll then consider your evidence and may also conduct our own investigation during the assessment.

The Department follows principles of procedural fairness. If we examine your registration, we’ll:

• Notify you of the examination and explain our concerns. This is to ensure you understand the process and any potential issues with your registration.
• Give you an opportunity to provide us with records about your activities within 30 days. We call this evidence.
• Allow a further period of time to provide evidence of up to 14 days if you request an extension of time before you reach the initial 30 day deadline.
• Provide you the opportunity to comment on information we find or any expert opinion before we make a decision on the eligibility of your activities.
• Stop our examination if the evidence you provide indicates your activities are eligible.
• Notify you of the outcome of the examination.

It's important to keep records. This is so that you can provide them to us if we examine your application or registration.

The most relevant records will be those that you created at the time you carried out your R&D activities. These are known as contemporaneous records.

If you are unable to provide us with records about your activities, an examination may determine that you did not conduct or plan to conduct eligible R&D activities.

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

The Decision-making Principles set out the rules for extension requests. It can allow a further 14 days to provide evidence if you do all the following:

• Make your request before the 30 day deadline expires.
• Explain why the evidence cannot be given in time.
• Confirm that you can give the evidence within the additional 14 days.

It's possible to seek an additional extension of time beyond 14 days under the Decision-making Principles. We can only award these requests in limited circumstances.

We may organise a meeting with you to discuss your registration and activities. This could be a:

• teleconference
• videoconference
• site visit.

The meeting may include your technical staff who are working on the R&D. It’ll assist us in understanding your activities and completing our assessment.

Our service commitment outlines what you can expect from us. It includes the way we'll work with you to make the program accessible.

We'll provide you with clear and comprehensive guidance. This is to ensure that you can understand program requirements and register eligible R&D activities.

We'll also ensure that any decisions we make on your activities will be fact-based, transparent and consistent.

We welcome your feedback about the program or our service. Find out how to provide feedback or make a complaint.