Camalic Pty Ltd and Innovation and Science Australia (Taxation)

Camalic Pty Ltd (the Applicant) sought registration for a core research and development (R&D) activity and three supporting activities for the 2013/14 financial year. The core activity involved the development of an algorithm to predict increases in shareholder value, with the objective of creating a software tool to assist company boards. The supporting activities included acquiring a framework and database, conducting a literature and technology review, and project planning. The Respondent, Innovation and Science Australia, had previously refused to register these activities.

The Senior Member was required to determine whether the Applicant conducted a core R&D activity in the relevant financial year, specifically whether the development of the algorithm constituted a core R&D activity and if it was excluded by section 355-25(1) of the *Income Tax Assessment Act 1997* (Cth). Additionally, the Senior Member had to consider whether the claimed activities were undertaken at all during the specified period and whether the supporting activities had a direct relationship to a core R&D activity. The Applicant also raised a procedural fairness argument, alleging that the applications were not assessed by individuals with sufficient knowledge of machine learning and software development.

The Senior Member found that the Applicant was an R&D entity. Regarding the core R&D activity, the Senior Member concluded that the development of the algorithm did not qualify as a core R&D activity. The Senior Member also found that the claimed supporting activities were not undertaken during the relevant financial year and lacked a direct relationship to a core R&D activity. The procedural fairness claim was dismissed due to a lack of evidence.

The Senior Member affirmed the objection decision under review, meaning the Applicant's appeal was unsuccessful.