The AAT has denied all the applicant’s claims for R&D deductions in respect of the activities it carried out at its open-cut coal mine in NSW from January 2000 to 31 December 2005 despite the Industry Research and Development Board (the Board), in the matter before the AAT, accepting that some of the activities qualified as relevant R&D activities. The activities in question generally involved increasing the depth of the relevant mining pits to more than 250 metres to dump “the over-burden and inter-burden” that was mined out of the pits and the related stability and strengthening activities to meet the demands of operating the mine at these greater depths.
The central issues before the AAT were whether the activities claimed by the applicant as R&D activities had in fact been carried out as claimed and if so, whether they were R&D activities as defined in s 73B of the ITAA 1936. It was also necessary to consider whether all or any of the claimed activities fell within the exclusions set out in s 73B(2C)(i) and (1) as being routine collection of information other than R&D activities, and/or whether they were activities associated with complying with statutory requirements.
In finding that none of the activities were R&D activities as defined in s 73B(1), the AAT generally found they did not involve the requisite “innovation” and “appreciable element of novelty” as required by the section.
In addition, the AAT found that the activities did not involve high levels of technical risk in terms of the requirement that the “probability of obtaining the technical or scientific outcome of the activities cannot be known or determined in advance on the basis of current knowledge or experience”. It also noted issues involving “sufficiency of evidence” and that the activities could be excluded as being routine collection of information required for statutory compliance.
(AAT Case [2013] AATA 573, Re DBTL and Innovation Australia, AAT, Ref No 2010/1153, Tamberlin DP and Ermert M, 16 August 2013.)
[LTN 200, 16/10/13]