Quick answer: Field trials can be eligible core R&D where the outcome could not be known in advance on the basis of current knowledge and can only be determined by a systematic progression of work conducted to generate new knowledge. Trialling a variety, rootstock or input that is already well characterised for your conditions is less likely to satisfy the core R&D criteria. Season length does not disqualify a claim, but registration follows income years, so if you intend to claim activities conducted across three income years, you need to register the relevant activities for each year. Where trial output is sold, feedstock rules may bring an amount back. You self-assess.
28 July 2026 — this article describes the current rules. The 2026-27 Federal Budget announced R&DTI changes scheduled to start 1 July 2028; those are not yet law, and we cover them separately in the proposed $50,000 Budget measure.
South Australia grows a disproportionate share of the country's wine, grain and horticulture, and Adelaide hosts the research institutions that serve them. So this question comes up here more than most places: the vineyard has been running trials for three seasons — is any of that R&D?
The honest answer is that agriculture generates a lot of careful, structured, data-rich work, and only some of it is R&D in the statutory sense. The distinction is not about how hard the work was, how much it cost, or how much data came out of it. It is about whether the outcome was knowable in advance.
The Line: Unknown Outcome, Not New-to-You
Core R&D activities are experimental activities whose outcome cannot be known or determined in advance on the basis of current knowledge, information or experience, but can only be determined by applying a systematic progression of work based on principles of established science — hypothesis, experiment, observation and evaluation, leading to logical conclusions — and that are conducted for the purpose of generating new knowledge (business.gov.au). AusIndustry publishes an agrifood sector guide applying that framework across the value chain, and it is the first thing to read.
"On the basis of current knowledge, information or experience" is the phrase that decides most agricultural cases, because it points outward. The question is not simply whether your business knew the answer. It is whether a competent professional could know or determine the outcome in advance on the basis of current knowledge, information or experience.
That cuts both ways, and the second direction is the one growers under-use. Agronomic performance is famously site-specific. Where a genuinely novel treatment, rootstock, canopy architecture or irrigation strategy has no reliable published basis for predicting behaviour in your soil, climate and disease pressure, the outcome may well be unknown in the statutory sense — and the trial designed to find out may be core R&D.
Indicatively — not a rule:
Often closer to core R&D
Usually not core R&D
A designed trial of a novel treatment or system where no reliable basis exists to predict the result for your conditions
Adopting a variety, rootstock or input already characterised for comparable conditions
Developing a new process or product where the technical outcome is genuinely uncertain — a fermentation route, a preservation method, a novel input
Benchmarking, yield monitoring and variety comparison run as ordinary management
Developing sensing, modelling or control technology whose achievable performance is unknown
Installing and configuring commercially available sensing or farm-management software
Work designed as an experiment: stated hypothesis, controls, replication, pre-defined measures
Work that produced useful data but was designed to run a business, and was written up as research afterwards
That final row is where most agricultural claims are actually decided. A block split three ways with different treatments, recorded properly, may be an experiment. The same block split three ways because that is how the contractor scheduled the work, with the results reviewed at harvest, generally is not — and no amount of retrospective narrative converts it. This is the same distinction we draw between business risk and technical uncertainty in our Insights.
Four Mechanics That Bite Specifically in Agriculture
1. A multi-season trial is several registrations
Registration with AusIndustry is annual: you register the activities you conducted in an income year, within 10 months after the end of that income year (business.gov.au). A trial that necessarily runs across several seasons does not become one long claim. Registration follows income years rather than seasons, so a programme spanning three income years needs a registration for each of them, describing what was conducted in that year. That is workable, but it has to be diarised — the deadline is covered in registration deadline, and it is not generally extendable at will.
Seasonality has a second consequence. Where the trial is genuinely constrained to one window per year, the record of why the progression takes three cycles is part of the evidence that the work is systematic rather than repetitive.
2. Trial output that gets sold
Grapes get crushed, grain gets delivered, trial fruit gets packed. Where R&D activities produce something that is sold or applied to your own use, the feedstock rules can trigger a feedstock adjustment. Under the current rules, the adjustment is generally determined by reference to the lesser of the feedstock revenue and the relevant notional deductions attributable to producing the feedstock output, with the resulting amount used in calculating the additional assessable income adjustment (ATO) — so both the inputs consumed and what the output realised are relevant. Trial-scale primary production and pilot processing runs are precisely the fact pattern the rules exist for. We work through the mechanics with a numeric example in a dedicated article in our Insights; the point here is to expect it and to record trial inputs and outputs separately from commercial ones, in the season, not at year end.
A related rule sits next door: to the extent expenditure is not at risk — because a levy body, processor or customer will pay you as a result of your incurring it, and would do so regardless of what the trial shows — s 355-405 of the Income Tax Assessment Act 1997 may remove the notional deduction. Both limbs matter (ATO, TR 2021/5). Grant funding raises the separate clawback rules (ATO).
3. The claimant has to be an eligible R&D entity
This can be a threshold issue for farm businesses. The offset is available only to an R&D entity, defined in s 355-35 of the ITAA 1997 as a body corporate incorporated under an Australian law, or one incorporated under a foreign law that is an Australian resident — and, where a foreign-law body corporate is resident in a double-tax-agreement country and carries on business through an Australian permanent establishment, it is an R&D entity only to the extent it carries on business through that establishment. Subsection 355-35(3) is a hard stop: an exempt entity cannot be an R&D entity (ATO). A business trading through a family trust, or a partnership of individuals, is generally not an R&D entity in that form, whatever the merits of the research. Restructuring has its own tax consequences and is a decision for your adviser. We set out the shape of the problem in our article on trusts and partnerships.
4. Land, plantings and long-lived assets
Expenditure on acquiring or constructing buildings, and certain capital items, is not claimable as R&D expenditure in the ordinary way (ATO). Where a depreciating asset is used for R&D activities, the notional deduction generally comes through its decline in value rather than its purchase price — a mechanism we cover separately. Plan on that distinction before you build the trial shed.
Agtech: A Software Claim Wearing Gumboots
A growing share of agricultural R&D is not agronomy at all — it is sensing, modelling, imagery, autonomy and decision software. That work is assessed under the same core/supporting framework, with AusIndustry's software development sector guide and its AI sub-guide as the working references.
The traps are the software traps, not the farm ones: integrating existing components and configuring commercial platforms is usually engineering rather than experiment, and a model that is expected to work once trained is not made experimental by being difficult to build. Where the achievable accuracy under real field conditions is genuinely unknown and the work is designed to find out, that is a different matter. See R&D for software and AI.
What to Put in Place Before Next Season
Write the hypothesis before the vines are pruned: One page: what is unknown, what you expect, how you will measure it, what result would falsify it.
Design for evaluation: Use controls, replication and pre-defined measures where appropriate. The R&DTI does not prescribe a particular experimental design, but the records should demonstrate a systematic progression from hypothesis through experiment, observation and evaluation to logical conclusions.
Separate trial rows, trial inputs and trial output in the records from the commercial block, in-season.
Diarise the registration for each income year the trial touches.
Record what you already searched: Evidence of the information reviewed, and the technical basis for concluding that a competent professional could not know or determine the outcome in advance, can support the assessment.
That last point is where a Registered Research Service Provider is most useful in this sector. AusIndustry describes RSPs as scientific or technical service providers you can engage to conduct R&D activities on your behalf, registered in specific fields (business.gov.au). Designing a replicated trial and documenting the prior-knowledge search is exactly the capability most growing businesses do not carry in-house. Two caveats: an RSP supplies research capability, not tax advice, and using an RSP does not guarantee eligibility — you still self-assess.
There is also a threshold point for smaller programmes. R&D expenditure for the income year must generally be at least $20,000 — that is the lower bound of the entitlement in s 355-100(1) of the ITAA 1997 (ATO), and qualifying expenditure incurred to a non-associate RSP may still form part of the offset where total notional deductions are below the usual $20,000 threshold. Precisely: where total notional deductions fall below A$20,000, the offset base is generally limited to qualifying expenditure incurred to a non-associate RSP for services in a registered field, together with eligible CRC Program contributions — the substituted base set out in the table in s 355-100(2) — other in-house amounts do not automatically join it. See claiming R&D under $20,000.
What the 2026-27 Budget Announced
The 2026–27 Federal Budget announced proposed R&DTI reforms for income years starting on or after 1 July 2028. The measures are not yet law. Until any amendments take effect, current-year R&DTI claims continue to be assessed under the existing rules. See our Budget update for further details on the proposed changes and their status.
Frequently Asked Questions
Q: Are vineyard or paddock trials eligible for the R&D Tax Incentive?
A: They can be, where the outcome could not be known or determined in advance on the basis of current knowledge, information or experience, and can only be determined by a systematic progression of work conducted to generate new knowledge. A designed, replicated trial of a genuinely novel treatment for conditions with no reliable published basis is much stronger than an unreplicated comparison written up after harvest. You self-assess.
Q: Is trialling a new grape variety R&D or ordinary farming practice?
A: Usually ordinary practice, if the variety is already characterised for comparable conditions — the answer was available even if your business did not have it. It moves toward R&D where there is no reliable basis to predict performance in your specific conditions and the planting is designed as an experiment to find out.
Q: How do I claim R&D that runs over more than one season?
A: Register each income year separately with AusIndustry, within 10 months after the end of that income year, describing the activities conducted in that year. A multi-season programme is a sequence of annual registrations, not one long claim.
Q: Does selling the wine or grain from a trial reduce my claim?
A: It can. Where R&D activities produce something that is sold or applied to your own use, the feedstock rules may bring an amount back into assessable income — on the ATO’s description, one-third of the lesser of the relevant feedstock expenditure or the feedstock revenue. Separately, expenditure that is not at risk — because someone will pay you as a result of incurring it — may not be notionally deductible at all under s 355-405.
Sources & Further Reading
business.gov.au — Agrifood sector guide for the R&D Tax Incentive
ATO — Eligibility for the R&D tax incentive — the $20,000 lower bound (s 355-100(1)) and the substituted RSP/CRC base (s 355-100(2))
ATO — Tax Reform: better targeting the R&D Tax Incentive — the announced 1 July 2028 measures and their status
legislation.gov.au — Income Tax Assessment Act 1997 — Div 355, incl. s 355-405
Related: R&D Tax Incentive in Adelaide · R&D for food & beverage · R&D for software and AI · what does not qualify · registration deadline
Talk to Ignition Research before the next trial goes in the ground — as a Registered Research Service Provider in Adelaide, we assist growers, winemakers and agtech companies with experimental design, technical R&D work and season-by-season supporting records within our registered RSP scope. We are not a registered tax agent: your company self-assesses and remains responsible for its own claim, with advice and lodgement handled by your tax adviser. Get in touch.
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.
Thinking about a project like this?
If you're weighing up an AI, software or technical improvement project and can't tell yet whether it's implementation or research, start with a quick read on where it sits.