To be an eligible core R&D activity for the R&D Tax Incentive program, one of your substantial purposes to conduct R&D needs to be to generate new knowledge. Generating new knowledge does not have to be the sole purpose of your activity for it to be an eligible core R&D activity. It is key that a substantial purpose to conduct your R&D is to generate new knowledge.
New knowledge can be general or applied. It may be a new theoretical or practical understanding of a subject. It also may be in the form of new or improved material, product, device, process or service. You need to have a substantial purpose to generate new knowledge that does not exist.
Examples:
Your new knowledge is in the form of a new product if it is a product that does not already exist in the same form.
You conduct core R&D activities to develop a new or improved process to create an existing product or achieve some other outcome. In this case, your purpose of generating new knowledge relates to the process and not to the product that the process may create.
You can conduct your systematic progression of work and find that you do not have support for your hypothesis. If you endeavour to learn why or how you cannot achieve your outcome, this can be new knowledge whether you achieve your outcome or not.
New knowledge can be general or applied. It may be a new theoretical or practical understanding of a subject. It also may be in the form of new or improved material, product, device, process, or service.
You need to have a substantial purpose to generate new knowledge that does not exist.