T.D.S BIZ PTY LTD and Commissioner of Taxation (Taxation)

The applicant, T.D.S BIZ PTY LTD, sought review in the Tribunal of the Commissioner of Taxation's decision to disallow its objection to a Notice of Assessment and Penalty Notice for the income year ended 30 June 2018. The dispute concerned the applicant's entitlement to the R&D tax incentive in relation to its supporting R&D activities, as well as its liability for an administrative penalty and whether remission of that penalty was warranted.

The Tribunal was required to determine three issues: first, whether the applicant was entitled to the R&D tax incentive for its supporting R&D activities for the relevant income year; second, whether the applicant was liable for an administrative penalty under section 284-75 of Schedule 1 to the *Taxation Administration Act 1953* (Cth); and third, whether remission of the imposed penalty was warranted under section 298-20 of Schedule 1 to the *Taxation Administration Act 1953* (Cth).

In its consideration, the Tribunal examined the definitions of "R&D activities" and "supporting R&D activities" under the *Income Tax Assessment Act 1997* (ITAA 1997). It noted that for a deduction for R&D expenditure to arise under section 355-205 of the ITAA 1997, the activities must be supported by at least one condition specified in section 355-210 of the ITAA 1997. The Tribunal's reasoning focused on whether the applicant's activities met these statutory requirements for entitlement to the R&D tax incentive. The decision under review was affirmed.