Quick answer: Clinical and preclinical work can be eligible for the R&D Tax Incentive where it involves genuine experimental activities with an outcome that cannot be known in advance, conducted in a systematic progression of work. Eligibility is not automatic — it depends on whether the specific activity meets the R&D tests. Claiming overseas trial activity generally needs a positive overseas finding. An advance finding provides certainty on whether activities meet the R&D Tax Incentive eligibility criteria. It is separate from, and does not replace, the overseas finding requirement, which applies specifically to expenditure on overseas R&D activities.
25 June 2026 — the 2026–27 Federal Budget announced R&DTI changes scheduled to start 1 July 2028; this article describes the current rules unless stated otherwise.
Walk through Adelaide BioMed City and you are standing in one of Australia's densest concentrations of health research. SAHMRI, the Australian Bragg Centre, the new Royal Adelaide Hospital and three universities sit within a few hundred metres of each other on North Terrace and at Lot Fourteen. For the biotech and medtech companies growing out of that cluster — and for the contract research organisations (CROs) that support them — one question comes up early and often: does the R&D Tax Incentive (R&DTI) apply to clinical trials?
The short answer is that it often can. Clinical trials, preclinical studies and device development frequently involve exactly the kind of systematic, experimental work the R&DTI is designed to support. But "often can" is not "automatically does", and the detail — especially around overseas trial sites and grant overlap — is where claims are won or lost.
This is general information from a Registered Research Service Provider (RSP). The eligibility rules below are set by the program and administered by AusIndustry and the ATO; whether your specific activities and costs qualify depends on your circumstances, so you should self-assess and seek your own advice.
What counts as eligible clinical and biotech R&D
The R&DTI does not have a special "biotech" category. Your activities have to meet the same definitions as any other claimant: a core R&D activity is an experimental activity whose outcome cannot be known in advance on the basis of current knowledge, conducted in a systematic progression of work to generate new knowledge. Supporting R&D activities are those undertaken directly to enable that core work.
Clinical and life-science research tends to fit this framing well, because genuine scientific or technical uncertainty is built into the science:
Preclinical work — in vitro assays, animal models, formulation and toxicology studies — testing hypotheses where the outcome is genuinely unknown.
Clinical trials (Phase I–III) — investigating safety, dosing, efficacy and mechanism in humans, where the result is often genuinely unknown at the outset. Note that a trial is not eligible simply because it is a trial: each activity still has to meet the core or supporting R&D tests, so eligibility is assessed activity by activity rather than assumed.
Medtech and device development — engineering and validating a new diagnostic, implant or digital health tool against a technical hurdle that has no known solution.
Eligible expenditure on these activities can include trial costs, payments to a CRO or other contractor, clinical and research staff time, and consumables — provided it is incurred on registered eligible activities. business.gov.au sets out the eligibility tests and the kinds of expenditure that may be claimed.
Where biotech claims get tricky
Routine vs experimental. Standard regulatory submissions, routine data collection, or established manufacturing usually are not core activities on their own — though some may qualify as supporting activities if undertaken directly to enable the experiment.
The "dominant purpose" test for supporting activities. Some supporting activities (for example, production-related work) must be undertaken for the dominant purpose of supporting core R&D — a higher bar worth checking early.
Documenting the unknown. The hypothesis and the unknown outcome should be visible in your protocol before the work starts, not reconstructed afterwards.
Because the eligibility test is about the nature of the activity rather than the sector, two companies in the same building can reach different answers. Our R&D Tax Incentive by industry overview shows how the same rules read differently across fields.
Overseas trials and the advance/overseas finding
Many Australian biotechs run trial sites abroad — to reach patient populations, specialist sites or trial capacity that simply is not available locally. This is where a common assumption catches people out.
The R&DTI is designed to support R&D conducted in Australia. Expenditure on activities carried out overseas is generally not claimable unless you obtain an overseas finding from Industry Innovation and Science Australia (administered through AusIndustry). To get one, the overseas activity broadly has to meet conditions including:
it has a significant scientific link to one or more core R&D activities conducted in Australia;
it cannot be conducted in Australia (for example, the patient population, facilities or geography are unavailable here);
the work is covered by an approved application; and
the Australian expenditure on the related core activities is greater than the overseas expenditure.
It helps to keep two distinct findings straight, because people often conflate them:
An advance finding is optional. It gives you a binding ruling from Industry Innovation and Science Australia on whether your activities are eligible core or supporting R&D — and that certainty can apply for up to three income years. You use it when you want to lock in eligibility before committing significant spend.
An overseas finding is not optional if any of the work is conducted outside Australia: it is the precondition for claiming expenditure on overseas activities. Without it, overseas trial expenditure simply cannot be claimed.
The overseas-finding deadline is the part that catches biotechs out, and it is unforgiving. The application generally must be submitted before the end of the income year in which the overseas activities are conducted or planned. Late applications are not ordinarily accepted under the legislative framework. The finding is also prospective and assessed against your application, so the scientific link between the Australian and overseas legs needs to be designed in, and documented, from the outset. business.gov.au's separate guides on applying for an advance finding and applying for an overseas finding set out each process and its timing.
For Adelaide companies running a local Phase I and an offshore Phase II, this is often the single highest-value structuring conversation to have early — and the one with the hardest deadline. For more detail on the process and timing, see our explainers on advance and overseas findings.
Records, and the grant-overlap trap
Life-science R&D is unusually well-documented by nature — and that works in your favour, provided the records are kept and mapped to your claim.
Trial protocols and amendments — the contemporaneous statement of hypothesis, method and unknown outcome.
Ethics (HREC) approvals and regulatory correspondence — evidence of a systematic, governed program.
Results, datasets and analyses — showing the experiment was actually run and evaluated.
CRO and contractor agreements and invoices — to substantiate who did what, where, and at what cost.
There is one trap that catches biotech especially hard: grant overlap. MRFF and NHMRC funding is common across Adelaide BioMed City, and where a grant funds the same R&D expenditure you also claim, a clawback adjustment can apply so you don't benefit twice on the same dollars. Similarly, feedstock rules can bite where trial inputs are transformed or consumed. Neither rules you out — but both need to be planned for. We cover the mechanics in our note on grants, recoupment and clawback; the key is to separate grant-funded and self-funded spend in your ledger from day one.
This is the practical role of an RSP: not to give tax advice, but to help define, structure and evidence the research itself so it stands up. A Registered Research Service Provider works alongside your tax agent — they handle the offset, clawback and finding lodgements; we make sure the underlying science is defensible. If you're based locally, our R&D Tax Incentive in Adelaide page covers the South Australian context.
A planning note: you may have seen discussion of 2028 R&DTI reforms. As at the date of this article these are proposed measures, not law, and should not be relied on for current-year decisions.
Talk to us before your income year ends
If you're building out of Adelaide BioMed City — or running trial sites anywhere offshore — the smartest time to get the structure right is before the work happens, not at lodgement. As a Registered Research Service Provider we can help you frame the science activity-by-activity, document the unknown outcome in your protocol, and flag where an advance or overseas finding belongs in your plan.
Talk to Ignition Research before your income year ends — if any trial work is overseas, the overseas-finding deadline is unforgiving.
Frequently asked questions
Q: Are clinical trials eligible for the R&D Tax Incentive? A: They often can be. Trials that involve systematic, experimental work with an outcome that can't be known in advance — generating new knowledge about safety, dosing or efficacy — may qualify as core R&D activities. Eligibility depends on the nature of each activity, so you should self-assess against business.gov.au guidance and seek your own advice.
Q: Can I claim overseas clinical trials? A: Generally only if you obtain an overseas finding from AusIndustry. The overseas activity broadly must have a significant scientific link to Australian core R&D, be unable to be conducted in Australia, and be outweighed by Australian expenditure. The application usually must be made in the income year the activities are first conducted.
Q: Is preclinical or biotech research claimable? A: Preclinical studies — assays, animal models, formulation and toxicology — can qualify where they involve genuine technical uncertainty and a systematic experimental approach. The test is the nature of the activity, not the research phase or the sector.
Q: What records do I need for clinical-trial R&D? A: Strong contemporaneous evidence: trial protocols and amendments, ethics (HREC) approvals, results and analyses, and CRO/contractor agreements and invoices — all mapped to your registered activities. Keep grant-funded and self-funded expenditure clearly separated to manage clawback.
Sources & further reading
business.gov.au — Check if you are eligible for the R&DTI (business.gov.au)
business.gov.au — Apply for an advance finding (business.gov.au)
business.gov.au — Apply for an overseas finding (business.gov.au)
ATO — Expenditure you can claim (R&D Tax Incentive) (ato.gov.au)
Related: R&D Tax Incentive by industry · R&D Tax Incentive in Adelaide · Registered Research Service Provider
This article is general information from a Registered Research Service Provider about the R&D Tax Incentive. It is not tax, legal or financial advice; eligibility depends on your circumstances and you should self-assess and seek your own advice.
