Absolute Vision Technologies Pty Limited and Innovation and Science Australia (Taxation)

This matter concerned an application by Absolute Vision Technologies Pty Limited (AVT) for review of a decision by Innovation and Science Australia (ISA) to confirm that certain activities undertaken by AVT did not satisfy the definition of eligible research and development (R&D) activities under the *Industry Research and Development Act 1986* (Cth) and the *Income Tax Assessment Act 1997* (Cth). The dispute centred on whether AVT's claimed activities constituted eligible core or supporting R&D activities.

The Tribunal was required to determine whether the claimed activities were core R&D activities, meaning they were experimental, their outcomes were not determinable in advance, they were conducted for the purpose of generating new knowledge, and were not excluded by section 355-25(2) of the *Income Tax Assessment Act 1997*. Additionally, the Tribunal had to consider whether any activities qualified as supporting R&D activities, being directly related to eligible core R&D activities and undertaken for the dominant purpose of supporting them.

The Tribunal found that the primary evidence relied upon by AVT, consisting of three versions of an "AVT R&D Activity Evidence Summary," was not contemporaneous. These documents were prepared years after the purported activities took place and lacked independent corroboration. Furthermore, the author of these summaries provided no evidence or explanation regarding their contents, including the generation of screenshots presented as "experiment logs." The Tribunal also gave little weight to the opinion of Mr Ross-Gowan, a tax professional, as he was not a technical expert and therefore could not speak to the material in a relevant way. The Tribunal noted that the information presented in AVT's R&D Activity Summary differed from what was originally claimed in its R&D Applications.

On 18 October 2019, ISA confirmed its decision that none of AVT's claimed activities satisfied the definition of R&D activities. AVT subsequently applied to the Tribunal for a review of this decision. The Tribunal affirmed ISA's decision, finding that the claimed activities did not meet the conditions for eligible core or supporting R&D activities.