AusIndustry has released an updated guide on the eligibility of software development activities under the R&D tax incentive. The refreshed guidance was developed in consultation with industry stakeholders, including a panel of R&D applicants and advisers, the Tech Council of Australia and the Australian Taxation Office, the program’s joint administrator.
Some key takeaways are:
- The guidance reaffirms that software development activities may be eligible activities under the R&D tax incentive.
- If you a conducting software development activity using Aigle, Waterfall, Rapid methodologies etc, you must show that these methodologies were used as part of a systematic progression of work that you applied when carrying out your experiments.
- Some routine testing activities, such as data migration, bug fixes and beta testing, can be part of a core R&D activity where they constitute part of a systematic progression of work.
- Emphasise the importance of retaining contemporaneous documentation that can be use the support the R&D activities undertaken. The new guide provides some examples of the types of documentation that should be retained by R&D claimants.
A copy of the new software guide can be access here. For more information, please contact your TGG advisor.