The Research and Development (R&D) Tax Incentive program is pleased to announce the release of its latest guidance product Software-related activities and the Research and Development Tax Incentive. The release of this product is intended to assist businesses conducting eligible software-related research and development (R&D) activities in accessing program benefits.

As Australia’s software sector has continued to evolve over time, so has the need to provide them with updated guidance that reflects modern and commonplace software activities. Software-related R&D has always been a major part of the R&D Tax Incentive program. In recent years, Information and Communications Technology (ICT) projects have comprised more than 40 per cent of program registrations (2018-19 financial year).

The refreshed guidance was developed in consultation with stakeholders that have a deep understanding of the software development sector. A draft of the guide was released for public comment in May 2021, followed by workshops involving the Tech Council of Australia and the Australian Taxation Office, the program’s joint administrator.

Key updates to the guidance include:

  • adding additional software-specific R&D examples
  • a case study illustrating the self-assessment process and the registration form in the customer portal
  • updating guidance regarding the software exclusion, aligning it with all other exclusions listed in subsection 355-25(2) of the ITAA 1997
  • providing links to supporting resources.

The release of this guidance product marks the first of several modules planned to help businesses understand the eligibility of their software-related R&D activities. Future modules will cover record-keeping guidance in software-development, sector-specific case studies, exploration of prominent classes of software-related R&D activities and video content designed to support applicant registrations.

Read the Software-related activities and the R&D Tax Incentive guidance product.

Register for an information session on the new guidance.