• Work performed for you under contract

    If the R&D activity is undertaken for you by a contractor, documents relating to the contract and the R&D activities (for example, the project report and invoices) must contain:

    • the date(s) the R&D activities are undertaken
    • sufficient detail to ascertain the amount of expenditure incurred on the R&D activities as opposed to other goods or services being provided under the contract
    • ownership of results - ownership of or rights to the resulting intellectual property as opposed to an end product.

    If the contract is with your associate, the fee must be charged on an arm's length basis and only amounts paid are eligible for a notional R&D deduction.


    To establish the relationship between your R&D activities and the expenditure you have incurred under the contract, we may need to look through the contract to establish the extent of the work done by the contractor on your behalf, particularly if you are not contracting at arm's length. You must keep sufficient records for this purpose. This may be required where the broad nature of the agreement makes it difficult to determine the extent to which your expenditure has been incurred on R&D activities.

    End of attention
      Last modified: 19 Jun 2012QC 26104