These alerts are in relation to expenditure incurred with associated entities, and activities conducted overseas for foreign related entities.
The ATO is concerned these arrangements are being used to:
In Taxpayer Alert TA 2023/4 (Research and development activities delivered by associated entities) the ATO identifies arrangements where an entity incorrectly claims the R&D tax offset for expenditure incurred under an agreement with an associated entity who conducts those activities.
Taxpayer Alert TA 2023/5 (Research and development activities conducted overseas for foreign related entities) outlines the ATO's concerns about arrangements where Australian entities claim the R&D tax offset for expenditure incurred on R&D activities conducted overseas. Arrangements of concern include where an R&D entity has purported that R&D activities were conducted for its own benefit, but those activities were instead conducted for a foreign entity that is 'connected with', or is an 'affiliate' of the R&D entity.
The ATO encourages accountants and tax agents to read these alerts and consider if their clients need to contact the ATO or make a voluntary disclosure by amending their R&D tax incentive claim. Penalties may apply to participants of these types of arrangements.
These penalties can be significantly reduced if the amendment request is treated as a voluntary disclosure.
For more information, visit the Australian
Government ATO website.
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Ref: ATO website, Tax Professionals Newsroom, 14 December 2023