Australian heavy rare earths producer Northern Minerals Limited (ASX: NTU) announced that that it has entered into a settlement agreement with the Australian Taxation Office (ATO) that settles all matters relating to the company’s refundable Research and Development (R&D) tax offset claims for the financial years ended 30 June 2017 and 2018, concluding the ATO’s review of those claims.
The settlement agreement also documents an agreed refundable R&D tax offset for the financial year ended 30 June 2019 and a framework for reviewing the company’s refundable R&D tax offset claim for the financial year ended 30 June 2020.
As part of the settlement process, the company has adopted recommendations from the ATO for improving its internal policies and procedures with the aim of streamlining future R&D claims.
The settlement agreement reduces the original refundable R&D tax offsets claimed for the financial years ended 30 June 2017 and 2018 by $21,309,237. Noting that only half the original refundable R&D tax offset for the financial year ended 30 June 2018 was previously refunded by the ATO, the net cashflow effect of the settlement agreement for the financial years ended 30 June 2017, 2018 and 2019 is a net refund of $9,921,638 payable to the company on or about 18 September 2020.
In light of the settlement agreement, the company no longer has any amounts owing to the ATO in respect of the financial years ended 30 June 2017 and 2018.
Except as set out above, the terms of the settlement agreement are confidential.
CEO Mark Tory said, “Whilst a lengthy period of time has passed from the date of lodgement of the 2017 and 2018 returns, the Company is pleased that this matter has come to a close and we would like to thank all involved including the ATO and AusIndustry in reaching an amicable settlement of this dispute”.