Home » News » AusIndustry Software Sector Guidance and Hypothetical Machine Learning Case Study – February 2025

AusIndustry Software Sector Guidance and Hypothetical Machine Learning Case Study – February 2025

Watch this video for an insightful summary of the latest R&D Tax Incentive Industry Update, produced in February 2025: AusIndustry Software Sector Guidance and Hypothetical Machine Learning Case Study

An increasing amount of software development activity in recent years focused on artificial intelligence and/or machine learning, which in turn is leading to more R&D claims involving machine learning. This likely led AusIndustry to release new guidance, being a hypothetical machine learning case study in September 2024.

This hypothetical case study shows how entities using machine learning techniques can assess their activities for the R&D Tax Incentive program.

The key takeaways from this case study include the following:

• This highlights the expectation of ‘investigation of current methods’- i.e. the example highlights an instance where models exist, but are not accurate.
• Whilst AI is a relatively new and developing field, companies need to be careful not to assume that projects involving AI will automatically qualify under the R&D Tax Incentive (in the same way that companies undertaking software development activities are not necessarily automatically eligible). Eligibility of companies’ R&D activities will come down to assessment of the activities and their underlying supporting documentation against the law.
• It’s important to remember that although a company’s circumstances may appear similar to this case study, their activities may not be eligible. Companies should assess their activities thoroughly in accordance with the legislation and AusIndustry guidance documentation.

Where relevant, the content of this video may have been based on guidance publications released by AusIndustry and the ATO. Additional guidance material on the R&D Tax Incentive is often progressively published by the programme regulators on their respective websites:

• ATO
• AusIndustry

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