Taxpayer Alert TA 2017/5 — Claiming the Research and Development Tax Incentive for software development activities

Taxpayer Alert TA 2017/5

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The publicly published HTML version of this Taxpayer Alert is available on the ATO Legal Database: https://www.ato.gov.au/law/view/document?DocID=TPA/TA20175/NAT/ATO/00001

Title: Claiming the Research and Development Tax Incentive for software development activities

Issued by: Australian Taxation Office and the Department of Industry, Innovation and Science (joint).

Subject matter: identifies arrangements that incorrectly claim the R&D Tax Incentive (R&DTI) for whole-of-project software development costs where:

• the activities do not satisfy the definitions of “core R&D activities” or “supporting R&D activities” in ss 355‑25 and 355‑30 of the Income Tax Assessment Act 1997; and/or
• expenditure is claimed on activities that produce or relate to producing goods/services without satisfying the dominant-purpose test; and/or
• excluded internal-administration software activities (s 355‑25(2)(h)) are claimed.

See also: TA 2017/5A (Addendum) at TA-2017-5A.md.

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