Ultimate Vision Inventions Pty Ltd and Industry, Innovation and Science Australia (Taxation)

Case [2025] ARTA 1813

Ultimate Vision Inventions Pty Ltd and Industry, Innovation and Science Australia (Taxation) [2025] ARTA 1813 (17 September 2025)

Applicant/s:  Ultimate Vision Inventions Pty Ltd

Respondent:  Industry, Innovation and Science Australia

Tribunal Number:                2017/1319, 2018/6110

Tribunal:General Member C. Willis   

Place:Melbourne

Date:17 September 2025  

Decision:The Tribunal affirms the decisions under review.

.............[sgd]...........................................................
                  General Member C. Willis

Catchwords

TAXATION – research and development tax incentive – design, development and evaluation of digital health and fitness management system – whether whole of project approach is appropriate – whether evidence of R&D activities being conducted as registered – whether core R&D activities conducted – whether supporting R&D activities conducted – whether experimental activities – whether outcome of activities could be known or determined in advance – whether systematic progression of work based on principles of established science – whether activities conducted for purpose of generating new knowledge – decisions under review affirmed

Legislation
Income Tax Assessment Act 1997 (Cth), Division 355, sections 355-5, 355-20, 355-25, 355-205, 355-210

Industry Research and Development Act 1986 (Cth), sections 27A, 27J, 27L, 30D, 30E

Cases

Absolute Vision Technologies Pty Limited and Innovation and Science Australia (Taxation) [2022] AATA 2319
Active Sports Management Pty Ltd v Industry Innovation and Science Australia [2024] FCA 1346
John W Blackman v Commissioner of Taxation [1993] FCA 345
Body by Michael Pty Ltd and Industry Innovation and Science Australia [2025] ARTA 44
Coal of Queensland Pty Ltd v Innovation and Science Australia [2021] FCAFC 54
Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409
Industry Research and Development Board v Coal & Allied Operations Pty Ltd [2000] FCA 979
Moreton Resources Limited and Innovation and Science Australia [2019] FCAFC 120
Ultimate Vision Inventions Pty Ltd and Innovation and Science Australia (Taxation) [2019] AATA 1633
Ultimate Vision Inventions Pty Ltd v Innovation and Science Australia [2022] FCA 606
Ultimate Vision Inventions Pty Ltd v Innovation and Science Australia [2023] FCAFC 23

Secondary Materials

Explanatory Memorandum to Tax Laws Amendment (Research and Development) Bill 2010 (Cth)

Statement of Reasons

INTRODUCTION

  1. Ultimate Vision Inventions Pty Ltd (the Applicant) registered certain activities (the ‘Activities’[1]) relating to the development of a Health and Fitness System (the ‘HFS’) with Industry, Innovation and Science Australia (the Respondent) in relation to the financial or income years ended 30 June 2014, 30 June 2015 and 30 June 2016 (collectively the ‘Relevant Years’).

    [1] In this decision the term ‘Activity’ or ‘Activities’ is used to refer to an activity or activities as initially registered under section 27A of the IRD Act upon application by the Applicant, whether or not it was subsequently determined that they were ‘R&D Activities’ as defined for the purposes of that Act.

  2. Registration of research and development activities with the Respondent under the Industry  Research and Development Act 1986 (Cth) (‘IRD Act’) is a pre-condition to accessing taxation incentives under Division 355 of the Income Tax Assessment Act 1997 (‘ITAA 1997’).

  3. The Respondent subsequently decided that none of the activities put…

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AGLC
Ultimate Vision Inventions Pty Ltd and Industry, Innovation and Science Australia (Taxation) [2025] ARTA 1813
Case
[2025] ARTA 1813
Decision Date

CaseChat Overview and Summary

Ultimate Vision Inventions Pty Ltd (the applicant) appealed against the refusal of Industry, Innovation and Science Australia (the Respondent) to register its activities as research and development (R&D) activities for the income years 2015 and 2016. The applicant sought review of the Respondent’s decision under section 27J(2) of the Innovation and Science Australia Act 2015 (IRD Act). The primary issue before the court was whether the activities conducted by the applicant during the relevant income years were properly registered as R&D activities under the IRD Act. Specifically, the court needed to determine whether the whole of project approach was appropriate, whether the activities were conducted as registered, whether they were core or supporting R&D activities, and whether they involved experimental activities.

The court examined the evidence presented by the applicant regarding the design, development and evaluation of a digital health and fitness management system. It assessed whether the applicant's activities met the criteria for R&D activities under the IRD Act. The court noted that for an activity to be considered R&D, it must be conducted systematically and involve experimental activities. The outcome of these activities must not be known or determinable in advance, and they must be based on established scientific principles. The applicant argued that its activities were systematic, experimental, and conducted for the purpose of generating new knowledge. However, the court found that the applicant's activities did not meet the necessary criteria, as they were primarily focused on the practical application and refinement of an existing product rather than the generation of new knowledge. Consequently, the court affirmed the Respondent's decision not to register the applicant's activities as R&D activities for the specified income years.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The Commissioner of Taxation is the entity with responsibility for the general administration of the ITAA 1997.Registration of activities under the IRD Act For the purposes of the IRD Act the terms ‘R&D activities’, ‘core R&D activities’, ‘supporting R&D activities’, ‘R&D entity’ and ‘income year’ have the same meaning as in the ITAA 1997: section 4 of the IRD Act. Section 27A of the IRD Act provides that:(1)The Board must, on application by an R&D entity, decide whether to register or refuse to register the entity for either or both of the following for an income year:(a)one or more specified activities as core R&D activities conducted during the income year;(b)one or more specified activities as supporting R&D activities conducted during the income year. For each activity registered as a ‘supporting R&D activity’ for an income year, the registration must also specify one or more activities as the corresponding ‘core R&D activities’. If any of those specified core R&D activities are not registered for the R&D entity for the same income year, then the registration must also specify the income year for which the core R&D activity was registered: subsection 27A(3). Section 27D sets out the requirements for applications for registration. An application to register activities under section 27A for an income year must be in the approved form, accompanied by the fee (if any) specified in the regulations and be made within the time period set out in the provision. The Respondent may request the applicant to give further information about their application: section 27E. The Respondent may conduct an examination of all or part of an R&D entity’s registration under section 27A for an income year for the purposes of making one or more findings under subsection 27J(1): subsection 27F(1). The Respondent may examine an R&D entity’s registration on its own initiative, and must examine an R&D entity’s registration if requested by the Commissioner of Taxation or where the R&D entity has applied for findings to be made under subsection 27J(1) about its registration: subsections 27F(2), (3). During an examination of an R&D entity’s registration the Respondent may request the entity to provide information about the entity’s registration: section 27H. Under subsection 27J(1) the Respondent may make one or more findings about an R&D entity’s registration under section 27A for an income year as follows:·That all or part of a registered activity was (or was not) a core R&D activity conducted during that year.·That all or part of a registered activity was (or was not) a supporting R&D activity conducted during that year and in relation to one or more specified core R&D activities.[8][8] Those core R&D activities may have been registered or conducted at different times as set out in paragraph 27J(1)(c). Note 2 to subsection 27J(1) says that the Respondent could make a finding that all or part of a registered activity was not a core R&D activity or a supporting R&D activity where it had insufficient information to make a positive finding that all or part of a registered activity was a core R&D activity or a supporting R&D activity.