The Result: More Questions Than Answers
The June 2025 edition of the Department of Industry, Science and Resources (DISR) R&D Tax Incentive Insider (Insider) email has confirmed that, from 15 August 2025, an updated version of the R&D Tax Incentive (RDTI) registration application form will be available through the RDTI customer portal.
According to DISR, “Sections of the form have been reordered to better sequence and align information fields with the legislation. In some cases, new questions have been added or existing questions split into parts….character limits have been increased to enable applicants to provide more information about their R&D activities.” Further changes to improve usage of the form were referenced as well.
Taxpayers can continue to use the existing registration form up until 15 August. Any applications submitted after this date will be required to use the new form.
As always, the proof will be in the pudding and a future MJA Update will provide you with our view of the new application form when it goes live.
Another section of the email referred to the fact that, from 1 July 2025, DISR will be streamlining some of its processes to remove duplication and unnecessary steps that can cause confusion and contribute to delays in finalising program decisions. This MJA Update will detail the changes announced. Next week, we will provide a critique of what we believe amounts to a seismic change in DISR’s approach and orientation to the RDTI.
Here is what was announced in the Insider email:
“Recent feedback from you as well as decisions from the Administrative Review Tribunal have highlighted that some of our processes can be confusing. Much of this feedback has centred around the timeframes and processes for obtaining certainty about eligibility.
We have listened to that feedback and from 1 July we will be progressively implementing streamlined processes designed to improve your interactions with us. These include:
- a more efficient approach to conducting examinations which will:
- reduce duplicative requests for information, helping save you time and money
- deliver decisions around eligibility much sooner.
- being more systematic in limiting the use of examinations to circumstances when eligibility risks appear highest.
- reducing instances of applications being held ‘in review’ prior to registration, helping to reduce the time it takes to register your application and aligning more closely with our service level agreements.
Information about what to expect when you interact with us can be found in the RDTI program charter. If you have questions about how we are streamlining our processes, contact your case manager*. “
* We think this is a typo as only applicants currently under review have a case manager.
The announcement has attracted some positive feedback in forums such as LinkedIn with commentators encouraged by expressions like “more efficient approach”, “reduce duplicative requests” and” save you time and money”. What was missing from the announcement, however, was the ‘how’ – how will examinations be made more efficient? why will time and money be saved? what constitutes the highest risks of eligibility?
The approach announced in the Insider is now reflected, in part, on DISR’s website here.
And there was important additional detail provided at the 12 June meeting of the Stakeholders Reference Group (SRG) for those invited to attend.
It was confirmed at that meeting that, going forward, DISR will no longer interact directly with taxpayers other than through formal examinations. Risk assessments and education visits are a thing of the past. In short, it has abandoned its previously-published Integrity Framework.
Formal examinations will be commissioned by DISR where they are concerned the taxpayer has a high risk of ineligibility. There is also the capacity for the ATO to refer matters on the eligibility of R&D activities to DISR for an examination. (And let’s not forget the ATO has the power to independently assess the eligibility of R&D activities.)
Further, in assessing the eligibility of individual R&D activities, DISR has indicated that, if it finds one element not proven (e.g., the ‘outcome not known’ requirement), then it will not go on to consider any other aspect of the activities in terms of eligibility. The activity will be failed. This critical change is not documented on the DISR website.
So it is this dramatic change in approach that explains how the efficiencies will be achieved in term of saving time and money in DISR interactions – no risk reviews, only examinations and only needing to find one failed element in an activity to disallow it completely. The declared efficiencies are suddenly sounding somewhat less appealing.
Furthermore, what isn’t detailed are the criteria used by DISR to determine what constitutes a high risk of ineligibility. This is a key omission as taxpayers will now be jumping at shadows when they prepare their registration applications. In fact, the new approach puts enormous pressure on the quality of registration applications as this is apparently the only mechanism DISR can use to make the decision to put taxpayers into examination with no precursor steps available.
We believe that DISR needs to provide more detail on its website regarding these changes so that the claiming community can be better informed as to what to expect. At the moment, the published material leaves too many questions and provides incomplete answers.
Next week, the MJA Update will provide our commentary regarding these changes and table the concerns that we have that we will seek to take forward in the Strategic Examination of Research & Development (SERD) currently being undertaken by the Federal Government.