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R&D Tax Incentive determinations are notifiable instruments that set out how the law is interpreted and applied when administering the R&D Tax Incentive program. When a determination is in force it is binding on Industry Innovation and Science Australia and its delegates except in certain circumstances, such as during a review of a reviewable decision. If an application or registration is examined, any applicable determinations will be applied.

View the determination on the Federal Register of Legislation.

Background to this determination

Clinical trials require careful planning, monitoring and regulatory oversight to minimise risks. Activities involved in clinical trials that are covered by this determination are deemed to meet the requirements of the R&D Tax Incentive for being ‘core R&D activities’. That is, the outcome of clinical trial activities covered by this determination cannot be known or determined in advance and can only be determined by applying a systematic progression of work, and that clinical trials covered by the determination are conducted for the purpose of generating new knowledge.

This determination was developed in consultation with the Australian Taxation Office, the Department of Health and through public consultation. It was approved by Industry Innovation and Science Australia and came into effect on 1 April 2022.

This clinical trials determination simplifies application to the R&D Tax Incentive program and provides certainty for companies whose activities fall within the scope of the determination.

Using the determination when you register

The determination can be used by companies conducting clinical trials when applying to register those activities under the R&D Tax Incentive program and describing ‘core R&D activities’.

An applicant should first indicate the intention to rely on the determination at the question "What was the hypothesis?". An applicant should respond with:

  • Covered by Industry Research and Development (Clinical Trials) Determination 2022. – RDTI D 2022/01. The CTA for the clinical trial or CTN registration number for the clinical trial is provided to demonstrate that a clinical trial is being conducted that meets the requirements of the determination. CTA No. is xxx OR CTN No. is xxx.

Please note: You need to insert your trial’s particular CTA or CTN number to replace the XXX in your response at “CTA No. is xxx OR CTN No. is xxx.

It's important that companies use the full name of the determination.

Please note the CTA or CTN is provided to the company when the trial is registered with the TGA. This evidence of registration as well as evidence of payment of registration should be kept with other evidence of activities.

Applicants may also indicate an intention to use the determination at questions “A brief description of the activity" and/or “What new knowledge is this core activity intended to produce?”, if applicable (dependent on answering ‘Yes’ to question "Does this core activity commence after the end of your income period for this application?").

For relevant questions after "What was the hypothesis?”, the applicant may use an abbreviated reference to the determination being relied upon: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.

  • Question: "A brief description of the activity." Respond with: "Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "What new knowledge is this core activity intended to produce?" Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "Did you conduct this core activity for a substantial purpose of generating new knowledge?" Select: “Yes”.
  • Question: "What new knowledge was this core activity intended to produce?" Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "How did the company determine that the outcome could not be known in advance?" Select: “Other”.
  • Question: "Please explain what sources were investigated, what information was found, and why a competent professional could not have known or determined the outcome in advance." Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "Please explain why the company did not search existing knowledge." Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "What was the experiment and how did it test the hypothesis?" Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "How did you evaluate or plan to evaluate results from your experiment?" Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "If you reached conclusions from your experiments in the selected income period, describe those conclusions." Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "What evidence did the company keep about this core activity?" Select: “Other” Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "Please describe the other evidence." Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.

Using the determination when applying for an Advance or Overseas Finding (AOF)

Some organisations apply for advance or overseas findings to seek certainty about whether their activities are core R&D activities before they register.

Please note: For AOF applications, the determination can only be used if all parts of the core R&D activity are occurring solely in Australia. If any part of the activity occurs overseas; e.g., if the evaluation or conclusions are sent to a parent company overseas, then the activity will not be deemed to be an Australian core activity.

An applicant should indicate the intention to rely on a determination at question “Describe the core R&D activity”, and respond with:

  • Covered by Industry Research and Development (Clinical Trials) Determination 2022. – RDTI D 2022/01. The CTA for the clinical trial or CTN registration number for the clinical trial is provided to demonstrate that a clinical trial is being conducted that meets the requirements of the determination. CTA No. is xxx OR CTN No. is xxx.

Please note: You need to insert your trial’s particular CTA or CTN number to replace the XXX in your response at “CTA No. is xxx OR CTN No. is xxx.

For questions after this question, the applicant may use an abbreviated reference to the determination being relied upon: respond with “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.

  • Question: "Describe the hypothesis." Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "Identify the experiment." Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "Explain the observation and evaluation." Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "Describe the logical conclusions to be drawn." Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "Why do you consider that the outcome of this activity cannot be known or determined in advance?" Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.
  • Question: "Describe the new knowledge the claimed core R&D activity is intended to generate". Respond with: “Relying on the R&D Tax Incentive determination 2022/01 on clinical trials”.

AOF applicants need to identify the ‘significant scientific link’ between the overseas activities and at least one Australian core activity. This is required to assess whether the overseas activities meet the expenditure test in s 28D(5) of the IR&D Act.

This should be done at the question, “Please describe the ‘significant scientific link’ between the overseas activities and the Australian core activity.” At this question, additional information will be required to describe the ‘significant scientific link’ between the overseas activities and the Australian core activity. In other words, explain why the Australian core activities could not be completed without the conduct of the overseas activity.

Please note when responding to questions that you will need to demonstrate that the expenditure condition at subsection 28D(5) of the IR&D Act has been met.

We may need to ask for more information about core R&D activities covered by the determination where meeting this condition is not sufficiently demonstrated in the application.

Exclusions and R&D not covered by the determination

As some clinical trials do not involve an unknown outcome and/or they involve commercialisation activities, they are not covered by this determination.

Activities not covered by the determination may still be a core R&D activities. An R&D entity will need to demonstrate that those activities meet the criteria independently, without the support of this instrument.

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