Use this flow chart to determine if your business activities are eligible. To claim the R&D Tax Incentive, you must undertake a core R&D activity.
Under the R&D Tax Incentive, a distinction has to be made between core and supporting R&D activities with the additional requirement that core and supporting R&D activities be reported separately.
Definition of core activities
Core R&D activities are experimental activities:
Whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience, but can only be determined by applying a systematic progression of work that:
– Is based on principles of established science; and
– Proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions; and
That are conducted for the purpose of acquiring new knowledge (including knowledge or information concerning the creation of new or improved materials, products, devices, processes or services).
Further to this general principle, some activities are specifically excluded from qualifying as core R&D activities.
Definition of supporting R&D activities
Supporting R&D activities are activities directly related to core R&D activities. If supporting activities are undertaken for normal operational reasons, they only remain eligible where the dominant purpose for conducting them is to support core R&D activities.