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ARTICLE · 25 JULY 2023

Acquisitions of goods and services as supporting R&D activities

Holding Redlich
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Seek advice early in the RDTI process & ensure that the legal requirements are clearly satisfied before making a claim.

AustraliaTax
Megan Bishop
Megan Bishop
Nikhil Sachdev
Nikhil Sachdev
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The recent decision of the Federal Court in T.D.S. Biz Pty Ltd v Commissioner of Taxation [2023] FCA 710 emphasises that the acquisition of a good or service that is not off the shelf can constitute a supporting R&D activity requiring registration for the research and development tax incentive (RDTI).

In the decision the Federal Court upheld the Commissioner of Taxation's (Commissioner) decision to deny T.D.S. Biz Pty Ltd's (TDS) RDTI claim because a supporting R&D activity was carried out overseas, however, was not covered by an overseas finding as required – TDS had understood that overseas acquisitions of components for its electric tricycle prototype was a mere acquisition of components required for activities solely undertaken in Australia, and therefore, did not constitute an "activity" for the purpose of the RDTI.

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This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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