Home » News » 2022 Annual Report for IISA Shows Rapid Decline in R&D Tax Dispute Litigation

2022 Annual Report for IISA Shows Rapid Decline in R&D Tax Dispute Litigation

January 23rd, 2023

Industry Innovation and Science Australia (IISA) is the government department responsible for determining whether companies’ activities meet the legislative criteria eligible under the R&D Tax Incentive.

The 2021-22 Annual Report for IISA was recently released, and a section of the report provides an update on legal matters and litigation relevant to the department.

When comparing the 2021-22 Annual Report with corresponding reports from preceding years, a rapid decline in the number of R&D Tax Disputes arising between companies and IISA is evident:

Year Ended Number of Registrations AAT Matters Resolved AAT judgments handed down Current AAT Matters at Year End
30 June 2022 12,090 10 0 12
30 June 2021 12,330 17 2 20
30 June 2020 10,544 26 4 28
30 June 2019 12,393 16 2 41

The above relates to ISA matters on activity eligibility only and not R&D Tax Disputes involving the ATO.

This reduction in litigation is despite the number of registrations not materially declining.

This decline may be attributable to a combination of:

  • Changes to compliance processes by the regulators;
  • Better quality of registrations submitted;
  • Companies with ineligible activities refraining from participating in the programme;

Reduction in disputes is a good outcome for both companies and the regulators, and hopefully a sign of improved health of the R&D Tax Incentive overall.

Please get in touch with our office if you would like to speak to someone about a potential  R&D claim, or check out our website for more information.

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