What you need to know
- The R&D Tax Incentive (RDTI) is a federal program, jointly administered by AusIndustry and the ATO, offering a tax offset for eligible research and development.
- Eligible AI and software development can be in scope where it involves genuine experimental work to resolve technical uncertainty, but routine configuration usually is not.
- Eligibility is determined by AusIndustry and the ATO, assessed with your accountant. Nothing here is tax advice.
- Gibson is exploring the RDTI for our own AI development on Vertex AI and the Claude model family, and a number of the businesses we build for are too.
- It is usually handled by specialist R&D tax advisers, not your regular accountant, and many work on a success-fee basis (a percentage of what they recover), so exploring it often costs little up front.
- If you commission a custom AI build, that development may be R&D-relevant. We build and document it; you and a specialist assess any claim.
Important: this is general information, current as of May 2026, and is not tax, financial or legal advice. The R&D Tax Incentive is administered by AusIndustry and the ATO, and eligibility for any activity is determined by them. Gibson is not a registered tax agent. Speak to your accountant or a registered R&D tax specialist about your circumstances before you rely on anything here.
When a business builds custom AI, a fair question comes up: is any of this development eligible for the R&D Tax Incentive? Most of the writing on the topic is dense, written by tax consultants, and aimed at large companies. As a business that actually builds AI, we went looking for the plain version, both for our clients and for ourselves. Here is what we found, in builder's language.
What the R&D Tax Incentive actually is
The R&D Tax Incentive (RDTI) is the federal government's main support for business research and development. It is jointly administered by AusIndustry, which assesses whether activities are eligible R&D, and the ATO, which administers the tax offset. In broad terms it provides a tax offset for eligible R&D expenditure, with the detail of rates and thresholds set by the program and confirmed on business.gov.au.
When AI and software development can be in scope
This is the part builders care about. The program is not interested in routine work. It is interested in genuine experimental activity: work whose outcome cannot be known or determined in advance on the basis of current knowledge, conducted in a systematic way to resolve real technical uncertainty. In software and AI terms, configuring an off-the-shelf tool generally is not R&D, while developing a genuinely novel system, where you do not know at the outset whether your approach will work and you have to experiment to find out, sometimes is. The distinction is specific, and it is assessed by AusIndustry and the ATO, not by a vendor.
The test is technical uncertainty. If you knew it would work before you started, it probably is not R&D. If you genuinely had to experiment to find out, it might be. Either way, that call belongs to your accountant and AusIndustry, not to us.
How we are looking into it for our own builds
Gibson builds AI through Sandbox on Google Cloud Vertex AI and the Claude model family. We have been exploring the R&D Tax Incentive ourselves, specifically to support the technology builds we run, and a number of the businesses we build for are looking at it too. Some of that work is straightforward integration. Some of it is genuinely experimental, where we are resolving uncertainty about whether a given approach will produce a reliable result. The practical change that has come out of it is discipline: documenting the technical uncertainty we set out to resolve, the experiments we ran, and the outcomes, as we build. That documentation is good engineering practice regardless of tax, and it is exactly the record an eligibility assessment needs.
What this means if you build AI with Gibson
If you commission a custom AI build, the experimental development within it may be R&D-relevant for your business. We are not going to tell you it qualifies, because that is not our call to make. What we will do is build the work properly and document it clearly: the problem, the technical uncertainty, the approaches tried, and the results. That gives you and your accountant a clean basis to assess eligibility and make a claim if it is appropriate. The build stands on its own commercial merits; any R&D treatment is a potential bonus you pursue with a professional.
Why your regular accountant may not raise it
Here is the part most business owners do not know. The R&D Tax Incentive is usually handled by specialist R&D tax advisers, not your general accountant. Many of those specialists work on a success-fee basis: they take an agreed percentage of whatever they actually recover for you, rather than billing by the hour, so if there is nothing to claim there is typically little or nothing to pay. A standard accountant generally does not work this way and often will not raise the incentive at all, because assessing technical R&D eligibility sits outside ordinary compliance work. In other words, your accountant staying quiet on it is not evidence that you do not qualify. Fee models do vary, so always confirm the percentage, any minimums and the terms in writing before you engage anyone.
How to actually pursue it
The RDTI is a self-assessment program jointly administered by AusIndustry and the ATO. In broad terms you register your R&D activities with AusIndustry within 10 months of the end of your income year, then claim the offset in your company tax return with the ATO. It is generally available to companies (an eligible R&D entity) and carries a minimum R&D expenditure threshold (commonly around $20,000 a year, with some exceptions). The exact rates and thresholds are set by the program, so confirm the current detail on business.gov.au and the ATO's R&D Tax Incentive pages, both linked from Gibson's grants-finder. Then take your specific activities to a registered R&D tax specialist or your accountant. If you are also looking at up-front funding, a grant and the R&D Tax Incentive are separate mechanisms and a technology business may be able to use both, subject to the rules, as covered in our small business grants guide.
The honest summary
Eligible AI and software development can be in scope for the R&D Tax Incentive, the test is genuine technical uncertainty and experimentation, and the people who decide are AusIndustry, the ATO and your accountant, not a vendor. What Gibson brings is the build and the documentation behind it. If you want a custom AI build done properly and recorded cleanly, see Sandbox or brief the team, and bring your accountant into the R&D conversation early.
Frequently asked questions
What is the R&D Tax Incentive?
The R&D Tax Incentive (RDTI) is a federal program jointly administered by AusIndustry and the ATO that provides a tax offset for eligible research and development activities conducted by Australian companies. It is the government's main mechanism for supporting business R&D. Eligibility and rates are defined by the program, not by us, so confirm current details on business.gov.au and with your accountant.
Can AI or software development qualify for the R&D Tax Incentive?
It can, where the work meets the program's definition of eligible R&D, which generally involves experimental activities whose outcome cannot be known in advance and which are conducted to resolve genuine technical uncertainty. Routine software configuration usually does not qualify, while genuine experimental development sometimes does. Whether any specific build qualifies is determined by AusIndustry and the ATO, assessed with your accountant or a registered R&D tax specialist.
Is Gibson a tax advisor?
No. Gibson builds AI and software; we are not registered tax agents or R&D tax consultants, and nothing here is tax advice. What we can do is build and document the development work clearly, so that you and your accountant have what you need to assess eligibility and make a claim if appropriate.
Can a grant and the R&D Tax Incentive both apply?
They are separate mechanisms, and in some cases a business uses both, subject to the rules on how grant-funded expenditure interacts with an R&D claim. This is exactly the kind of question to put to your accountant or a registered tax agent before you rely on it.
What does it cost to claim the R&D Tax Incentive?
It is usually handled by specialist R&D tax advisers rather than a general accountant, and many of them work on a success-fee basis: they take an agreed percentage of what they actually recover for you, so there is often little or nothing to pay if there is nothing to claim. Your regular accountant typically does not work this way and may not raise it at all. Fee models vary, so confirm the percentage, any minimums and the terms in writing before engaging anyone. This is not tax advice.
How do I start looking into the R&D Tax Incentive?
Read the official guidance on business.gov.au and the ATO's R&D Tax Incentive pages, then speak to a registered R&D tax specialist or your accountant about your specific activities. The program is self-assessed: you register activities with AusIndustry within 10 months of your income year end, then claim in your company tax return. Gibson's grants-finder links straight to the official ATO source.
