CANBERRA: The Australian Taxation Office will make chasing those who misuse the research and development tax incentive as a top priority, after a tax agent was sentenced to 29 months in prison for his role in two fraudulent R&D claims worth $550,000. The tax office has confirmed the tax agent will serve at least 18 months in prison after he was found to be involved in two separate fraudulent R&D tax incentive claims made in 2013 while working for an unnamed company. The Victorian County Court last week sentenced the man, after finding he transferred $380,000 of the $549,719 claimed into his personal bank account. Fairfax reports the man plead guilty in September to defrauding the Australian government tax incentive scheme, admitting to providing falsified invoices for R&D claims in a business. The tax office reports the man worked in a role as a tax professional within the business that made the fraudulent claims.
ATO deputy commissioner Will Day said in a statement on the matter that serious R&D tax incentive abuse is now a top priority for cross-agency investigations involving the Serious Financial Crime Taskforce. “Those who deliberately do the wrong thing and claim the incentive which they are not entitled to will be caught and held to account for their actions,” he said. The case prompted Minister for Revenue and Financial Services Kelly O’Dwyer to remind businesses on Friday that the crime taskforce is “actively pursuing” cases in which it believes companies are claiming R&D funds when not entitled to them. “Unfortunately, there are those who believe they can game the system for their own advantage. Our message to those people is you will be caught, and you will face the consequences,” O’Dwyer said last week. When contacted by SmartCompany, the tax office referred businesses to its resources on company and project eligibility for claiming the tax incentive.
The ATO reminds businesses that individuals cannot claim the incentive, and it is only available to incorporated entities that are in most cases undertaking research work for their own businesses, rather than a third party. The ATO outlines that eligible activities for claiming R&D funds are those where the “outcome cannot be known or determined in advance on the basis of current knowledge”, or are genuinely being undertaken for the purpose of generating new knowledge.
