How to prepare a successful R&D Tax Incentive claim
A practical guide for horticulture businesses
By Tania Harman and Daniel Knox
The Australian Government’s R&D Tax Incentive offers horticulture businesses a valuable opportunity to fund innovation and reduce costs. This practical guide explains how to prepare a successful claim, avoid common pitfalls and maximise benefits.
Innovation drives growth in horticulture from developing pest-resistant crops to improving sustainability practices. The R&D Tax Incentive (R&DTI) helps businesses invest in these projects by providing tax offsets for eligible activities, but success depends on careful planning and documentation. The R&DTI can refund a significant portion of these R&D costs (a 43.5% refundable tax offset for eligible small companies), but to benefit, you must maintain strong records or risk your claim being disallowed by the Australian Taxation Office (ATO) or the Department of Industry, Science and Resources (DISR).
The R&DTI offsets can significantly reduce the overall tax bill, improve cash flow and free up resources for further investment in research and development. In practice, eligible R&D expenses such as employee wages, contractor fees, materials and certain overhead costs can be claimed, making innovation more financially accessible and less risky for horticulture businesses.
Are your activities eligible?
Eligible projects must involve core R&D activities and supporting activities. Our article, ‘R&D in horticulture and claiming R&D Tax Incentives’, in the October 2025 issue outlined the detailed definitions of eligible core and supporting activities. In short, core R&D activities are experimental undertakings designed to produce new knowledge, where the outcome is not known beforehand. Supporting R&D activities are tasks that are closely connected to core R&D efforts or are primarily carried out to assist these core activities.
Examples of eligible R&D activities in the horticultural industry may include controlled trials for new crop varieties and testing soil treatments for improved yield. Activities like routine testing or market research do not usually qualify. Listed below are further examples of possible eligible R&D activities:
- Crop development and improvement: Breeding new fruit or vegetable varieties with improved shelf life or disease resistance; genetic research to enhance drought tolerance; developing high-yield cultivars for export markets.
- Sustainability and environmental innovation: Creating biodegradable packaging; developing water-efficient irrigation systems; researching soil regeneration techniques.
- Pest and disease management: Experimenting with biological pest control; developing integrated pest management systems using AI; testing new organic fungicides.
- Post-harvest and storage solutions: Designing innovative cold storage systems; researching treatments to reduce spoilage; developing smart sensors for real-time quality monitoring.
- Technology integration: Implementing robotics for automated harvesting; using machine learning to predict crop yields; developing precision agriculture tools for nutrient management.
- Climate adaptation: Trials for heat-tolerant crop varieties; research on greenhouse designs for extreme weather resilience; developing new carbon-neutral farming practices.
Documentation is critical. Keep project plans, experimentation logs and financial records. Refer to our November 2025 article, ‘Record keeping for Australia’s R&D Tax Incentive: What horticulture SMEs need to know’, for a detailed discussion on documentation requirements. Audits by DISR and ATO do happen. You must maintain clear records and document decision-making.
The registration process
To apply for the R&DTI, eligible companies must register their R&D activities with DISR within 10 months after the end of their income year. You will need to provide detailed information including company details, project descriptions, hypotheses, experimental activities and a financial breakdown of eligible costs. Common mistakes include vague descriptions, missing supporting evidence, and late submissions.
Lodging with the ATO
After registration with DISR, claim the R&DTI through the company tax return. Eligible costs can include staff salaries, materials, and overheads. Marketing, unrelated operational expenses or business as usual expenditure is not eligible.
Partnering with an experienced R&D tax advisor
The R&DTI continues to be a focus area for the ATO and using an experienced R&DTI Advisor can significantly reduce errors and improve the quality of your R&DTI claim. Advisors help ensure compliance with DISR and ATO requirements and provide guidance on audit readiness. Advisors also assist in accurately assessing eligibility and preparing documentation to avoid costly mistakes.
In summary, navigating the R&DTI process requires careful attention to documentation, compliance and eligibility criteria. By investing in robust record-keeping and seeking advice from experienced R&D tax professionals, companies can maximise their claim benefits while minimising risks. Proactive preparation and thorough understanding of requirements will help ensure your research and development initiatives receive the support they deserve.
If you would like to discuss this further, please reach out to Tania or Daniel (details below).
Tania Harman
Director – R&D Tax and Government Incentives
PwC Australia
M: 0421 051 740
E: tania.harman@au.pwc.com
Daniel Knox
Partner – R&D Tax and Government Incentives
PwC Australia
M: 0438 335 794
E: daniel.knox@au.pwc.com
This content is for general information purposes only and therefore does not constitute financial product advice and should not be relied upon as financial product advice. For financial product advice that takes account of your particular objectives, financial situation or needs, you should consider consultation with professional advisors.