AusIndustry has a new compliance process. How does it work in practice?

December 18, 2018 Sarah Lander

On 1 July 2018, AusIndustry announced that the R&D Tax Incentive compliance process has been streamlined to reduce the burden and improve the timeframes for companies chosen for examination. The stated aim is to make compliance simpler.

MJA recently met with Ausindustry management in Canberra to gain a better understanding of how the new process works in practice.

If a company is selected for examination, AusIndustry will provide you with a Notification of Examination and a Statement of Issues which will explain the concerns they have with your registration and what you need to do.The company will have 30 days to provide AusIndustry with the evidence that it used to self-assess its eligibility for the program. A further period of up to 14 days may be granted. The examination may lead to a Finding being made about some or all of the company’s R&D activities. The company may need to amend its tax return if any of its registered activities are found to be ineligible.

In essence, the evidence AusIndustry refers to are any records kept during the time the company conducted its R&D and which it used to self-assess its eligibility known as contemporaneous records.

It is clear that the Notification of Examination and the Statement of Issues can be provided to the company without any other communication having occurred. Further, they will be provided prior to any review of the company’s contemporaneous records.

Based on MJA’s discussions with AusIndustry, we recommend that you consider the following steps when you receive a Notice and Statement:

• Contact the nominated AusIndustry representative to discuss the matter and request a meeting to assist in the preparation of the response. The request for a meeting will not necessarily be granted.
• Provide written commentary explaining the relevance and applicability of the supplied records
• Provide a written response to the Statement of Issues
• Adhere to the AusIndustry requests and timeframes as much as possible

Should you wish to discuss this matter further, please don’t hesitate to contact Sarah Lander on 02 9810 7211 or sarah.lander@mjassociates.com.au