The research and development (R&D) tax credit is a significant opportunity for companies to lower their tax liability and improve cash flow; however, the resources and time required to produce documentation are burdensome. A multinational consumer foods manufacturer looked to KPMG to help it overcome barriers that prevented them from previously taking full advantage of the R&D tax credit, including:

Business disruption

The company was spending significant time extracting and transforming data into the required format for R&D tax credit documentation. Technical teams running projects were needed to identify, transform, and supply the required voluminous data maintained on disparate systems, which was not an efficient use of their time.

Qualifying eligible activities

Identifying the right subject matter experts for interviews and scheduling time with them to gain their insights and details on the various R&D activities they conducted was often the only way to identify eligible tax credit activities and associated expenses. But these interviews, the necessary preparation beforehand, and subsequent follow-up requests took them away from their current work.

Preparing quality data to substantiate the claim

Reviewing existing contemporaneous technical documentation against the definition of “qualified research” to verify that various activities and projects qualify for the credit is complex and laborious even for tax professionals. The company lacked the sophisticated technologies needed to quickly review and understand vast amounts of data, much of it unstructured, over a span of years.

To learn more about how the KPMG dedicated Research Credit Services team coupled with IBM Watson can help you increase the amount of R&D income tax credits, please visit KPMG Research Credit Services with IBM Watson.

The research and development (R&D) tax credit is a significant opportunity for companies to lower their tax liability and improve cash flow; however, the resources and time required to produce documentation are burdensome. A multinational consumer foods manufacturer looked to KPMG to help it overcome barriers that prevented them from previously taking full advantage of the R&D tax credit, including:

Business disruption

The company was spending significant time extracting and transforming data into the required format for R&D tax credit documentation. Technical teams running projects were needed to identify, transform, and supply the required voluminous data maintained on disparate systems, which was not an efficient use of their time.

Qualifying eligible activities

Identifying the right subject matter experts for interviews and scheduling time with them to gain their insights and details on the various R&D activities they conducted was often the only way to identify eligible tax credit activities and associated expenses. But these interviews, the necessary preparation beforehand, and subsequent follow-up requests took them away from their current work.

Preparing quality data to substantiate the claim

Reviewing existing contemporaneous technical documentation against the definition of “qualified research” to verify that various activities and projects qualify for the credit is complex and laborious even for tax professionals. The company lacked the sophisticated technologies needed to quickly review and understand vast amounts of data, much of it unstructured, over a span of years.