Software R&D Eligibility Checklist

The Core R&D activity test in s355-25 ITAA 1997 plus the statutory exclusions and entity rules collapse to seven practical gates for software work. Pass all seven, you have a Core activity. Fail any one, you don't. Each gate has the question to ask your team.

1. New knowledge sought

Is the outcome new knowledge - not just a new product, feature or revenue line? Re-implementing a known technique to ship a feature is not new knowledge. Discovering whether a known technique works at your scale, on your data, or against your constraints often is.

Ask your team: "What did we learn that wasn't already documented or commercially available?"

2. Outcome unknown in advance

A competent professional in the field could not have known or determined the outcome by applying current knowledge. If someone could have answered the question by reading the docs or a textbook, it's not Core.

Ask your team: "Before we started, what did we genuinely not know how to predict?"

3. Systematic progression of work

There is a documented progression: hypothesis → experiment → observation → evaluation → conclusion. Not iteration as a vibe - iteration with stated, falsifiable hypotheses.

Ask your team: "What was our hypothesis, and what would have made us reject it?"

4. Experimental activities

The work involved experiments - comparisons against a baseline, A/B against a control, ablations, benchmarks. A development is not an experiment.

Ask your team: "What did we compare against, and how did we measure?"

5. Conducted for the purpose of generating new knowledge

The purpose at the time of the activity was knowledge-generation, not deployment of a known solution. Purpose is judged contemporaneously - not in hindsight after launch.

Ask your team: "If we'd known the answer up front, would we still have done the work?"

6. Not on the exclusion list

The activity isn't excluded by law - routine bug-fixing, software for internal admin, compliance work, market research, or maintenance of existing systems are all out. Read s 355-25(2) ITAA 1997.

Ask your team: "Would we have done this work even without an R&D angle, just to keep the lights on?"

7. R&D entity in Australia

You are a body corporate, incorporated in Australia (or a foreign corporation tax-resident here). Activities done overseas need a separate Overseas Finding application, lodged before year-end.

Ask: "Where was the work done, and where is the entity incorporated?"

For Supporting activities

Supporting activities don't need to pass gates 1–4 themselves. They need to be directly related to a Core activity, and undertaken for the dominant purpose of supporting it. Production-style activities (build-and-deploy, customer onboarding, data labelling at scale) face a stricter test.

If you fail a gate

You haven't necessarily failed the claim - you've failed that framing. The work may belong inside a different Core activity, as a Supporting activity, or in a different income year. RDTI Lodge re-frames borderline activities automatically as you classify evidence.