Latest Guidance on Research and Development (R&D) Claims


Let’s talk about recent updates from the Australian Taxation Office (ATO) regarding Research and Development (R&D) tax incentives. They’ve raised concerns about businesses claiming these incentives in ways that might not be fair or right. Two new alerts, TA 2023/4 and TA 2023/5, highlight specific issues—let’s break them down in simpler terms.

Taxpayer Alert TA 2023/4: R&D Claims through Friends

The ATO worries that some companies are wrongly claiming R&D tax benefits by getting their friends’ companies (associated entities) to do the work. This might make it seem like they did more research than they did, and that’s not okay. If you or your business has been doing this, it’s important to check and fix it. The ATO suggests coming forward voluntarily to correct any mistakes before they start checking your taxes more closely.

Taxpayer Alert TA 2023/5: R&D Activities Abroad

The ATO is also concerned about companies saying they did research overseas when it was actually for a friend’s company in another country. If your company has been doing R&D abroad but claiming the benefits as if it were for your benefit, that’s a problem. The ATO advises businesses to be honest about who benefits from the research. If you’ve made a mistake, it’s better to admit it early and fix things to avoid bigger problems later.


To make the most of R&D tax incentives and stay out of trouble, it’s crucial to follow the rules. The ATO is closely monitoring these claims to ensure they’re fair and accurate. If you think your business might have made a mistake, it’s better to come clean and fix it now to avoid more significant issues down the road. Stay informed, follow the rules, and consult with experts if needed to navigate the world of R&D tax incentives.