About the transparency reports
We're required by law to publish certain data about Research and Development (R&D) tax incentive claims reported to us by companies (R&D entities). Publishing this information will:
- provide transparency on the benefits received by R&D entities
- encourage voluntary compliance with the requirements of the R&D tax incentive (R&DTI) program
- increase public awareness of which companies have claimed the tax incentive.
Publication of this report is a legal requirement under section 3H of the Taxation Administration Act 1953 (TAA). It came into effect in July 2021, following reforms to the policy and administration of the R&DTI program, as a result of Treasury Laws Amendment (A Tax Plan for the COVID-19 Economic Recovery) Act 2020External Link.
Each year, the transparency report will be made up of 2 parts. These are:
- the Report of data about Research and Development tax incentive entitiesExternal Link (data report), published on data.gov.auExternal Link
- the Research and development tax incentive – transparency report, which provides an analysis of the data.
When we publish the report
We're required to publish the R&D data 2 years after the end of the financial year that the data relates to. The delay in publishing this information is designed to address any perceived commercial sensitivity of the data.
We published the first data report in early October 2024 and we'll continue to publish it annually.
What R&D data we publish
The data we publish in the report is specific and limited to the:
- name of the R&D entity claiming the R&DTI
- entity's Australian business number (ABN) or Australian company number (ACN)
- 'total R&D expenditure' – total notional deductions claimed (label Z in Part A of the R&DTI schedule) less any feedstock adjustments (label B in Part B of the R&DTI schedule).
We base this on what the R&D entity provided in its company tax return.
If an R&D entity amended its company tax return, we report both the original information provided by the entity and the last client-initiated amendment lodged with us. This includes any voluntary disclosures provided during a review or audit.
Commissioner-initiated amendments won't be published. If, during a review or audit, the Commissioner amended the labels, we're required to publish the total expenditure on R&D based on the company return lodged before the Commissioner-initiated amendment.
You're unable to opt out of having your R&D information published in the report. There are no exclusions.
Due to tax law confidentiality provisions in the TAA, we can't disclose any further information beyond what will be published in the report.
Data notes
Labels in the data report
There will be 5 labels in the data report on data.gov.au:
- Name – this is the name of the R&D entity on the date we extracted the data.
- ABN or ACN – if the R&D entity had a valid ABN when we extracted the data, then we've published the ABN; if not, we've published its ACN.
- Total R&D expenditure – this is based on the first information the R&D entity provided to the Commissioner and is the total notional deductions (label Z at Part A on the R&D schedule) less feedstock adjustments (label B at Part B on the R&D schedule).
- Adjusted total R&D expenditure – this is based on the last amendment the R&D entity provided to the Commissioner and is the total of notional deductions (label Z at Part A on the R&D schedule) less feedstock adjustments (label B at Part B on the R&D schedule).
- Income year – this is the income year for the R&D claim.
Notes about the total R&D expenditure amounts
Generally, wee round the total R&D expenditure amounts in the data report, so you may see differences between the totals in the data report and the amounts we've used in the information and charts in our analysis.
There are also R&D entities that we report a 'Nil' dollar amount for. This could be because:
- feedstock adjustments are more than the notional deductions
- the R&D entity adjusted the amount in their tax return
- the R&D entity didn't provide information regarding total R&D expenditure.
Consolidated groups
Where an R&D entity is part of an income tax consolidated group or multiple entry consolidated (MEC) group, the subsidiary members are treated as part of the head company for income tax purposes, for as long as they remain part of the group for income tax purposes.
The published total R&D expenditure amounts are those disclosed by the head company of the consolidated group or MEC group.
Data sources
We get the data for the data report from the company tax return and R&D schedule labels.
Company tax return
We include the entity in the data report if they've reported an amount at label 21A or 21U.
R&D schedule
The total R&D expenditure in the data report is the amount of total notional deductions less any feedstock adjustments. If notional deductions less feedstocks adjustments are negative or zero, the figure is reported as Nil.
We use Part A label Z to obtain the total notional R&D deduction amounts we include in the data report – this amount is worked out by adding together items 1 to 9 in Part A of the R&D schedule for both Australian-owned R&D (label X) and foreign-owned R&D (label Y).
We use Part B label B to obtain the feedstock adjustment amount.
Amendments
If you've reviewed your R&D claims and believe that there's an error in the information that we publish, you're able to correct any errors by lodging an amendment with us in writing.
If you've submitted an amendment and it's not processed before we extract the data, we publish the updated information in the next year's report. If you've amended your R&DTI claim, we publish both the original R&D expense amount and the amended R&D expense amount. If you've withdrawn your claim in full, we publish the original R&D expense amount with the amended R&D expense amount published as Nil.
Data assurance process
When preparing the data for publishing, we review and confirm the data in accordance with the information contained on our systems as at the date we extracted the data.
If you are an R&D entity (or their nominated representative) with data included in the report and there is an error, you can contact us.
What's not in the report
The information in the transparency report does not include:
- the R&D activities conducted by the entity
- the calculations behind notional deductions and feedstock adjustments
- clawback amounts other than feedstock adjustments
- the amount of R&D tax offset the entity received
- whether the R&D tax offset received was refundable or non-refundable
- the extent and nature of any ATO activity, including any past or ongoing audit or compliance activities
- whether the R&D entity was entitled to or received the R&D tax offset.
The report doesn't contain information collected by Department of Industry, Science and Resources (DISR) on behalf of Industry Innovation and Science Australia (IISA) as authorised under the Industry Research and Development Act 1986.
Communication approach
Since September 2023, ahead of the release of the first report, we:
- engage with key external stakeholders to inform them of the new reporting requirement and to get their input into our approach
- communicate directly with all affected R&D entities and their registered tax agents (in October 2023, February 2024 and July 2024), to inform them of the new reporting requirement and encourage them to review their information and amend any errors
- communicate directly with those R&D entities that lodged an amendment to let them know that both their original and amended amounts will be published
- communicate directly with those R&D entities that had their claim amended by the Commissioner to let them know we're unable to publish the Commissioner-amended amount; we'll only publish the original amount they claimed
- issue broader communications to the community to inform them about the new data report and provide them with access to comprehensive information about the data report.
Visibility for future applicants
To ensure future applicants are aware that the data they lodge in their R&DTI schedule will be included in R&DTI transparency reporting, we've added a notice to the R&DTI schedule 2024 (paper version) (PDF, 536KB)This link will download a file and digital version as well as the R&DTI calculator.
Administration of the R&DTI program
The R&DTI program is jointly administered by the:
- Department of Industry, Science and Resources (DISR on behalf of IISA)
- ATO.
DISR manages the registration process for the R&DTI program and we review the eligibility of the expenditure incurred on the registered activities. We leverage the skills of each agency to:
- reduce compliance costs for business
- increase certainty while maintaining program integrity.
The ATO and DISR regularly conduct engagement activities, including compliance reviews and audits of R&D entities to safeguard the integrity of the R&DTI program. Information in relation to these activities is not included in this report.
The R&DTI program is a self-assessment regime. Receiving a registration number from DISR doesn't mean the R&D activities meet the eligibility requirements. A registration number means the application has been received and is complete. R&D entities may still be subject to compliance action by DISR and the ATO.
About the R&D program contains further details, including the aim of the program and our joint charter with DISR.
Innovation success stories
DISR provides information on its website about the how the R&D tax incentive has helped companiesExternal Link.