Research and Development Tax Incentive program charter

The R&DTI program charter has been jointly developed by the Department of Industry, Science and Resources (DISR) and the Australian Taxation Office (ATO) to clearly explain:

• the roles of DISR and the ATO in the context of the R&DTI program
• what you can expect when you interact with us
• what we ask from you.

It also details the options available to you if you are unsatisfied with your interactions with us.

Content within this program charter complements:

• the ATO’s Charter
• DISR’s customer service charter and R&DTI service commitment.

The R&DTI is co-administered by:

• DISR on behalf of Industry Innovation and Science Australia (IISA); and
• the ATO.

IISA operates under the authority of the Industry Research and Development Act 1986 (IR&D Act). IISA’s functions are set out in the IR&D Act and associated Ministerial Directions and include:

• co-administration, monitoring and operation of the R&DTI
• advising the Minister about the operation of the IR&D Act.

On behalf of IISA, DISR registers companies for the R&DTI program and makes findings on the eligibility of R&D activities. These functions are set out in Part III of the IR&D Act.

The ATO is responsible for administering R&DTI expenditure claims.

Focus areas of this program charter are:

• navigating R&DTI interactions – from early engagement to claimed expenditure
• interacting with the co-administrators throughout the R&DTI process
• R&DTI decisions
• use and disclosure of information
• publication of information
• providing feedback on your R&DTI experience.

This R&DTI program charter provides general guidance only and does not change or create existing rights and obligations. It does not provide advice on:

• eligibility for the R&DTI, or the scope of eligible activities or expenditure
• reviews, examinations, or assessments conducted by DISR or the ATO
• Advance and Overseas Findings.

As part of the joint administration arrangements for the R&DTI:

• DISR administers registration and compliance of R&D activities
• the ATO is responsible for expenditure claimed on eligible R&D activities in the tax return.

You need to register your R&D activities with DISR then claim your tax offset through your annual tax return with the ATO.

Steps in the R&DTI process

When considering whether to contact DISR or the ATO, keep in mind that:

• DISR registers companies for the R&DTI program and makes findings on the eligibility of R&D activities
• the ATO is responsible for expenditure claimed in the tax return on eligible R&D activities.

What you can expect

The Public Service Act requires APS employees and agency heads at all times to behave in a way that upholds the APS Values: impartial, committed to service, accountable, respectful and ethical.

Reflecting DISR’s R&DTI Service Commitment, you can expect DISR’s guidance and decisions are well-informed, fact-based and transparent. DISR is also guided by the principles in its customer service charter: to be responsive, accountable, strive for continuous improvement, be consultative, and communicate.

Reflecting the ATO Charter, the ATO will be guided by the following commitments:

• fair and reasonable
• professional service
• support and assistance
• security of your data and privacy
• keeping you informed.

Things we ask you to keep in mind

When you contact the ATO or DISR seeking information or guidance on the R&DTI, we ask that you:

• refer to recent correspondence, DISR R&DTI registration numbers, and ATO reference numbers
• provide accurate information to enable us to provide well-informed guidance
• contact us well in advance of deadlines for registration or lodgement to resolve access to our systems or portals
• provide up-to-date contact information so that we can respond to you promptly
• ensure you are authorised by the company to speak to us about a registration, application or claim for expenditure
• understand that we cannot provide you with financial or legal advice
• keep up-to-date records throughout the R&DTI process.

Registrations

You need to register with DISR before you can claim for expenditure on eligible R&D activities through the ATO. You need to apply to register within 10 months of the end of the income year in which you conduct your activities. DISR will issue you with a registration number. You will need to enter this number in the R&D Tax Incentive schedule in your annual income tax return.

You are responsible for assessing whether you meet all legal requirements before you register for the R&DTI, even if you seek professional advice. Registering with us does not mean your activities are eligible. They remain subject to review.

DISR strives to process R&DTI applications as quickly and as efficiently as possible.

What you can expect

DISR’s 2023-24 performance measure is that applications for registration of research and development activities through the R&DTI are processed within:

• 40 business days for first-time registrants
• 20 business days for registrants that have applied within 6 months after the end of the income period
• 80 business days for registrations submitted from 6 to 10 months after the end of the income period.

The target for 2023-24 to 2026-27 is that 95% of company registrations are processed within the allotted timeframes for each criterion.

Examinations and findings

If DISR examines an application or registration, this will lead to a formal decision about the eligibility of all or some of your R&D activities. This is called a finding. A finding can come from either a pre-registration examination or a post-registration examination.

What you can expect

If DISR examines the activities in your application, you can expect DISR to:

• assign you a case manager who you can contact directly to discuss the examination and finding
• notify you of the examination and explain DISR’s concerns. This is to ensure you understand the process and any potential issues with your registration
• give you an opportunity to provide records about your activities within 30 days (we call this evidence)
• allow a further period of time of up to 14 days to provide evidence 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
• notify you of the outcome of the examination.

If you disagree with DISR’s findings, we recommend that you first speak to your case manager.

If you still disagree with the findings, you have the right to apply for an internal review of the decision. You must make requests for internal review within 28 days after we've notified you of the finding. If you disagree with an internal review decision, you can apply to the Administrative Appeals Tribunal for a review.

DISR provides further information and guidance on internal and external reviews of R&DTI decisions.

Use and disclosure of information

Information sharing between the ATO and DISR

Information sharing between the ATO and DISR is limited by legislation. When you share R&DTI information with the ATO, the ATO will only disclose this information to DISR if permitted by law.

At times, this means that you may be asked to provide similar or identical information and documentation to both DISR and the ATO.

When we request information from you, DISR and the ATO will endeavour to make it easy for you to identify and provide the information or documents we need.

We will:

• identify specific information that we are looking for, or a class of documents that may provide the information we need
• seek to minimise duplicative requests for information
• be open to receiving information in electronic or paper format, depending on your preferences.

Publication of R&D information

The ATO is required to publish information each year about R&D entities and the R&D expenditure that they have claimed.

The first publication is for R&D entities that lodged a 2022 company tax return with a R&D tax offset, and had their income year begin on or after 1 July 2021.

The ATO will be publishing this information on an annual basis. For further information on R&DTI transparency, please visit the R&D tax transparency reports.

Providing feedback on your R&DTI experience and this program charter

DISR and the ATO welcome your feedback on your experience interacting with the R&DTI. If you have suggestions on how DISR or the ATO can improve its administration of the R&DTI, we encourage you to contact us.