Government releases guidelines clarifying software development eligible for R&D tax incentive

The government has released new guidelines to help businesses claiming funding for software development through the research and development (R&D) tax incentive.

Minister for Industry, Science and Technology Karen Andrews said the guidelines will provide tech companies with greater clarity on their ability to claim software activities, and help them in making decisions.

“The majority of software businesses are trying to do the right thing, but some are claiming the incentive incorrectly,” Andrews said.

“The Guidance does not change the eligibility of software under the [R&D tax incentive], but provides more clarity to companies around what are considered eligible software research and development activities under the program and what are not, helping them to self-assess their claims more effectively.”

The guidelines follow almost a year of concern around the scheme, with then-Treasurer, now Prime Minister Scott Morrison announcing in last May’s Budget that changes would be made. He said an overhaul of the scheme would look to improve “the effectiveness, integrity, and additionality” of the program.

The Australian Financial Review then reported in December that companies including Airtasker, despite working with consulting firms to put together their claims, had been subject to audits of claims from several years ago and asked to pay back millions.

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