(Australia) Post Administration R&D Tax Offsets Deemed Personal Property in Account
by: Masi Zaki , Kate Spratt of Squire Patton Boggs (US) LLP  -   Restructuring GlobalView
Tuesday, May 30, 2023
Research and Development Tax Refunds Classification in Australia

Companies entering external administration often have outstanding tax filings. The external controllers appointed conduct initial and ongoing reviews as to those filings. Then, in time, they either bring the filings up to date or engage the tax office in order to revisit historical filings. Aside from being legally required to address a company’s filings, external controllers often focus on a company’s taxation affairs because there may be offsets or refunds due which can be realised as assets as part of the estate or in any transactions.

Depending on the corporate structure used and the rulings by the tax office, research and development (R&D) expenditure (among other expenses) can result in tax offsets and refunds post administration. Securing those refunds can sometimes result in priority disputes. In a unanimous decision[1] this week, the Court of Appeal has considered various issues relevant to R&D offsets and their treatment under the Personal Property Securities Act (Cth) (PPSA) and the Corporations Act (Cth) (Act) in a post administration context. 


[1] See Resilient Investment Group Pty Ltd v Barnet and Hodgkinson as Liquidators of Spitfire Corporation Limited (In Liq) [2023] NSWCA 118 (Resilient).

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