1. Eligible entity?
Australian-incorporated companies can be eligible, as can certain foreign-incorporated companies that satisfy Australian tax-residency or treaty/permanent-establishment conditions.
R&D Tax Incentive eligibility
Eligibility begins with the activity, not the size of the project.
The R&DTI is self-assessed. A company must satisfy entity rules and conduct eligible R&D activities. For core activities, the outcome must not be knowable in advance by a competent professional and must be determined through a systematic progression of work for the purpose of generating new knowledge.
Eligibility framework
Four questions that should be answered before claim preparation.
2. Core R&D activity?
At least one core R&D activity is required. The outcome must not be knowable in advance and the activity must be conducted to generate new knowledge.
3. Systematic progression?
The work should proceed through hypothesis, experiment, observation, evaluation and logical conclusions rather than routine implementation or trial-and-error without a technical proposition.
4. Supporting activities?
Other activities may qualify when directly related to a core activity, with an additional dominant-purpose requirement applying in specified circumstances.
Expenditure threshold
Eligible R&D expenditure is generally required to be at least $20,000, subject to exceptions involving registered Research Service Providers or CRC contributions.
Overseas activities
Overseas expenditure can require a positive overseas finding before it is claimed. Do not assume foreign activity automatically qualifies.
Evidence before eligibility
The question is not whether the project felt innovative.
Good R&D records explain the pre-existing knowledge, the technical hurdle, why the outcome could not be known, the experiment conducted, the observations and what was learned. They also separate experimental work from commercial production, routine coding, standard engineering and other non-R&D activity.
Official eligibility guidance
The Department of Industry states that R&DTI is based on self-assessment and sets out the entity, activity and expenditure requirements, including the $20,000 expenditure threshold and $150 million expenditure cap.
Check official R&DTI eligibility guidance →Need certainty?
The Department offers an optional advance finding process that can provide a legally binding decision on activity eligibility for up to three years. Expenditure is not covered by an advance finding.
Official advance finding guidance →R&D systems review
Build an evidence process that makes self-assessment easier.
I focus on activity and evidence systems, not eligibility guarantees. Tell me what the company is testing and how it records technical work today.
General information only. Eligibility should be assessed against legislation and official guidance with appropriately qualified advisers where necessary.