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AAT Decision – Camalic Pty Ltd
AAT decision in Camalic Pty Ltd and Innovation and Science Australia provides clarification about the requirements for a systematic progression of work as defined in subsection 355-25(1) and when software activities fall under the "management studies" and "social science" exclusions in subsection 355-25(2).
- On 3 June 2020, the Administrative Appeals Tribunal (AAT) handed down its decision in the matter of CAMALIC Pty Ltd (formerly Effective Governance (Australia) Pty Ltd) v Innovation and Science Australia. The AAT affirmed the decision of ISA that the Applicant’s activities were not eligible R&D activities.
- The AAT concluded that the Applicant never intended to build a bespoke machine learning algorithm, but aimed to train an existing machine learning algorithm. It followed that it did not meet the definition of core R&D activity. As the AAT found there were no core activities, the claimed supporting activities were also found to be ineligible.
- As the activities related to board management and shareholder value, the AAT considered that the activities (except the development of the algorithm itself) would fall within the "management studies" and "social science" exclusions.
- The AAT decision supports the department’s position that evaluating or applying existing software methods without a systematic progression of work that meets the requirements in paragraph 355-25(1)(a) is not sufficient by itself to be core R&D activities.
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