The Four-Part Test
To be eligible for the R&D Tax Incentive, activities must satisfy the legislated four-part test. The activity must involve a systematic progression of work, proceed from hypothesis to experiment, observation, or evaluation, be conducted for the purpose of generating new knowledge (including new knowledge in the form of new or improved materials, products, devices, processes, or services), and involve outcome uncertainty that could not be determined in advance on the basis of current knowledge, information, or experience.
Core vs Supporting Activities
The RDTI program distinguishes between core R&D activities — those that directly satisfy the four-part test — and supporting activities that are directly related to core activities. Both can be claimed, but supporting activities must be clearly linked to a core activity.
What Does Not Qualify
Activities that do not qualify include routine software development, quality assurance testing to existing standards, market research, commercial production, and activities where the outcome is known or determinable in advance. Understanding these boundaries is critical for a successful claim.
Getting Help
If you are unsure whether your activities qualify, ExaRDTI’s free 30-minute consultation can help. Our specialists assess your specific situation and provide clear guidance on eligibility.