Flagged in your Discovery Audit
We flag work that may be eligible in your Discovery Audit, so you can raise it with your tax agent before the build starts.
R&D Tax Incentive
How the R&D Tax Incentive may apply to software.
The Australian R&D Tax Incentive (RDTI), administered jointly by AusIndustry and the ATO, can return part of eligible R&D spending to your business. Some software development may qualify. Whether yours does, and what it is worth, is a question for a registered tax agent. Work done overseas can sometimes be claimed through a separate Overseas Finding application.
We are software engineers, not tax agents. What follows is a plain English orientation. The rules are published by the Australian Government, and any claim should be lodged by a registered R&D tax agent.
Offset rates
Where to find the current rates.
The Australian Government publishes the offset rates on business.gov.au. The rate that applies to you depends on your turnover and tax position, and only a registered tax agent can tell you what you would get back. Our accountants can look at this with you.
What typically qualifies
Eligibility, in software terms.
The RDTI tests for "core" and "supporting" R&D activities. The legal definitions are precise, what follows is the engineering shape of what tends to qualify and what tends not to.
Tends to qualify
- Building a novel system architecture where the existing literature does not give a known-good answer
- Algorithm or model development where the result cannot be predicted in advance
- Performance, scale or reliability work where the outcome requires experimentation to confirm
- Integration patterns where the technical path involves genuine trial-and-error
- AI/ML work where the model behaviour is itself the experiment
Tends not to qualify
- Pure UI restyles with no underlying technical uncertainty
- Integration of well-documented third-party APIs where the path is obvious
- Bug fixes, maintenance and routine deployment work
- Market research, sales, marketing and routine business analysis
- Work done overseas, unless it is covered by a separate Overseas Finding application
How we help, the truthful version
Records your tax agent can ask for.
We will not file a claim for you. That is your tax agent's job. We flag work that may be eligible in your Discovery Audit, and we keep build records your tax agent can ask for. Our accountants can then tell you what applies.
Build records
We keep build records your tax agent can ask for: the code history, the technical decisions we made and why, and what we tried along the way.
Advice from a tax agent
Our accountants at Crescendo can tell you whether your build may qualify and what it could be worth. They are a separate practice and you engage them directly.
Why this matters
The structural argument for building in Australia.
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Built with an Australian company
- Build records your R&D tax agent can ask for
- Built as though the Australian Privacy Principles apply
- Hosting region agreed in your Schedule of Work, including Australian cloud regions
- AEST working hours, no overnight queue
- Australian legal recourse if something goes wrong
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Pure offshore build
- Overseas work needs a separate Overseas Finding application to be claimed under the R&D Tax Incentive
- Privacy / sovereignty obligations harder to evidence and defend
- Cross-border data flow disclosures and contracts required
- Timezone lag, multiple business days per round-trip on tricky questions
- Limited legal recourse if delivery or quality falls over
Important. This page is general information about a public Australian Government program. It is not tax advice. It is not financial advice. Eligibility for the R&D Tax Incentive depends on the specific facts of your business, the activities you conduct and how those activities are documented. Before relying on anything here, speak to a registered R&D tax agent. We are software engineers, not tax agents. Our accountants at Crescendo can tell you whether your build may qualify. They are a separate practice and you engage them directly.