Quick answer: Under Division 355 of the Income Tax Assessment Act 1997, a core R&D activity must satisfy both limbs of s 355-25(1): its outcome could not be known or determined in advance on the basis of current knowledge, information or experience and could only be determined by applying a systematic progression of work that is based on principles of established science and proceeds from hypothesis to experiment, observation and evaluation, and it must be conducted for the purpose of generating new knowledge. On an EV charging or vehicle-to-grid build, installing chargers to a published standard, obtaining a grid connection and configuring a commercial charge-management platform are generally unlikely to meet that, subject to each activity's own facts and the statutory tests; s 355-25(2) also lists categories that cannot be core R&D activities at all, including activities associated with complying with statutory requirements or standards, and whether a given activity falls in one of those categories depends on its facts. The narrower work that may qualify is where achievable performance had no reliable predictive basis — for example a load-management strategy holding a site inside a constrained connection limit under uncertain arrivals — and the work was designed in advance to find out. Eligibility is self-assessed.
10 August 2026 — this article describes the current rules. The 2026-27 Federal Budget announced R&DTI changes proposed to apply to income years starting on or after 1 July 2028; those changes are not yet law.
The R&D Tax Incentive applies to activities, not to projects, sites or capital programmes. A core R&D activity is an experimental activity whose outcome could not be known or determined in advance on the basis of current knowledge, information or experience, and could only be determined by applying a systematic progression of work that is based on principles of established science and proceeds from hypothesis to experiment, observation and evaluation, and leads to logical conclusions — and which is conducted for the purpose of generating new knowledge (business.gov.au). Both limbs have to hold, and a depot programme can be unprecedented for the company, expensive and technically hard while containing no activity that meets them.
The established-science qualifier does real work on a charging or V2G site, because much of the tuning that happens there is empirical without being scientific: iterating a vendor scheduler's settings night after night until the shortfalls stop is a disciplined loop, but unless the progression reasons from the underlying power-system, electrochemical or control principles to a hypothesis, and from the observations back to a logical conclusion, it is trial and error rather than a core R&D activity.
This article is scoped to EV charging and bidirectional/V2G. Microgrid and virtual-power-plant dispatch, behind-the-meter solar-and-storage integration, and hydrogen and grid-scale battery plant each have their own article in our Insights.
The Parts That Are Ordinary Engineering
Most of a charging programme delivers a known outcome by known means. Charger selection, switchboard sizing, cabling and commissioning work to a performance envelope the manufacturer publishes and behaviour the wiring rules and connection standards specify; the uncertainty is about effort, cost and schedule, not attainability. Obtaining a connection offer and satisfying the network's technical requirements is a regulated process with a defined compliant answer. Standing up a charge-management or roaming platform and enabling its documented load-limiting and scheduling features uses capability the vendor already demonstrates. All three are generally unlikely to be core R&D activities, subject to each activity's own facts and the statutory tests.
Statutory requirements and standards exclusion
Separately, s 355-25(2) of the ITAA 1997 lists categories that cannot be core R&D activities at all, and one bites here: activities associated with complying with statutory requirements or standards. Conformance testing, certification work, safety-case documentation and installation testing may fall within that category where the activity is undertaken to comply with a statutory requirement or standard, including a requirement imposed by a regulator under legislation.
Internal-administration software
The same subsection excludes software developed for the dominant purpose of use by you, an entity connected with you or an affiliate of you in carrying on internal administration — worth testing a depot-operations tool against. See what does not qualify.
Where Core R&D May Actually Sit
The candidate activities are those where achievable performance, not buildability, was the unknown, and where the work was designed in advance to find out.
Smart charging and load management under a hard constraint
Where the question is whether a control strategy can hold a site inside a fixed connection limit while still meeting a departure deadline, under uncertain arrivals, unknown arrival states of charge and on-site generation, and no reliable predictive basis exists for the answer under those conditions, that may be a core R&D activity — provided the technical uncertainty is investigated through a testable hypothesis and the required systematic progression of work.
What lacks a predictive basis is rarely the optimisation method, which is published, but the site's own statistics: the dispersion of arrivals against the deadline, the distribution of arrival state of charge, and how those interact with a per-connector power ceiling and a non-vehicle load the controller may not see. The measure worth fixing in advance is therefore a service-level one — vans at target by the deadline, intervals above the limit — not an algorithmic one. Tuning a scheduler that already works, porting a published technique to a new site, or lowering the load limit until the problem disappears are different activities.
Bidirectional charging, V2G and degradation
Cycling a vehicle pack for grid or building service imposes a duty cycle — depth, rate, frequency, temperature, dwell — that published cycle-life results may not cover. Establishing by measurement what it does to usable capacity over time cannot be read off a datasheet and can require a systematic progression of work.
The hard part is measurement. Usable capacity does not fall out of ordinary operating data, so a trial needs a defined reference check — a controlled charge and discharge at fixed temperature, rate and depth, repeated on a fixed interval — and vehicles held out of the bidirectional cycle so calendar ageing and duty-cycle ageing can be told apart. Without that, observed drift belongs to the fleet's ordinary use as much as to the cycle under test.
Two boundaries matter. Operating a V2G asset commercially is not itself the experiment; the experimental activity is a bounded trial with a hypothesis, a defined end and a measured outcome, separable from revenue operation. And identifying a core activity says nothing about which expenditure on vehicles, chargers or labour can be claimed — a separate question for the company and its registered tax agent.
Interoperability that only testing can resolve
Implementations of the protocols between vehicle, charger and platform are partial, versioned differently and behave differently under edge conditions — interrupted sessions, plug-and-charge identity, reverse power flow, firmware revisions. Where achievable behaviour across a combination cannot be predicted from the specifications because those specifications are not fully implemented in the field, determining it by test may be experimental activity.
A specification-ambiguity log may help evidence why the expected behaviour could not be determined in advance, but whether the testing is excluded conformance work or a candidate core activity still depends on the facts of the particular activity.
What Structuring This Work Actually Produces
Contemporaneous records are expected (business.gov.au). On a live charging site, useful contemporaneous records may include the following:
A dated trial protocol and a measured baseline before the first run: The protocol states the unknown, the hypothesis, the measure and what result would count as a failure; the baseline records the site's behaviour under the existing configuration, without which later runs have nothing to be compared against. Written after commissioning, both are reconstructions the run data no longer maps onto.
A knowledge search that names what it did not answer: Standards, vendor documentation, network requirements, published cycle-life data — the useful artefact records the specific question each source left open, not a bibliography.
Version pinning: Control-strategy revision, charger firmware, vehicle software, metering configuration and site model all move during a build; a result not tied to a version cannot be attributed to anything.
A documented evaluation and conclusion: Records should show how the experimental results were evaluated and what logical conclusion was reached.
Activity and expenditure records: Records should allow the company to identify the work performed and link relevant expenditure to the activities.
The common failure mode is a trial run on the production depot under production pressure: the strategy is changed mid-run to keep vans on the road, so no run is a controlled comparison and no cycle produces an evaluable result.
Supporting Activities Under s 355-30
Activities that cannot be core may still qualify as supporting R&D activities under s 355-30 where they are directly related to core R&D activities. Where the activity is of a kind referred to in s 355-25(2), or produces goods or services, or is directly related to producing goods or services, it is a supporting activity only if it is also conducted for the dominant purpose of supporting a core activity (business.gov.au). Where installation, energisation or charging activities produce, or are directly related to producing, goods or services, the additional dominant-purpose test applies if those activities are being assessed as supporting R&D.
On a charging build the mapping usually splits three ways:
Work built only to run the trial: Metering and sub-metering installed for the trial period, temporary integration of an experimental controller into the site, and firmware or scripting written to execute and log the runs. This is the work most likely to need a supporting-activity analysis, because it is directly related to the core activity and has little other use.
Work with a mixed purpose: Permanent charger installation, ordinary energisation and commissioning, and network conformance testing. These serve the depot whether or not the trial happens, so any supporting-activity analysis has to identify the increment attributable to the experiment rather than treat the whole task as claimable.
Work that is operational: Charging vans for revenue routes, ordinary depot operations and running the retained strategy in production. Directly related to producing a service, and generally difficult to characterise as conducted for the dominant purpose of supporting a core activity.
If there is no core activity, there is nothing for supporting activities to attach to. How each of those categories is treated, and what expenditure follows, is a question for the company and its registered tax agent.
Australian Conditions Change Where the Unknowns Are, Not the Test
High rooftop solar penetration, minimum-demand conditions and active network constraints make "upgrade the supply" unavailable at many depot and kerbside sites, which is why the credible experimental questions here concern behaviour under constraint rather than hardware, and why a strategy validated in a different network, tariff and climate context may not indicate what is achievable here. Novelty of the local setting is not itself evidence that an outcome was unknown — it is a reason the answer may not be in the literature, which is where the search of existing knowledge, information and experience does the work. See R&D Tax Incentive in Adelaide and R&D for renewable energy.
Grants Interact with This
Charging and V2G trials are often co-funded, and where a government recoupment relates to expenditure you also claim, clawback "doesn't decrease the grant or offset you receive. Instead, it increases your assessable income" (ATO) — worth putting to your registered tax agent while a co-funded charging budget is still being built.
A Worked Hypothetical
Illustrative and hypothetical only — not a ruling, not a client, and not a statement that any of it is eligible. The company would self-assess each activity against the statutory tests.
A logistics operator electrifies a suburban depot: 40 electric vans, AC chargers rated at 22 kW per connector, a 250 kW rooftop array, a cold store, and a firm 400 kVA import limit the network will not increase inside the project timeframe. Vans return between about 18:00 and 23:40 depending on route, need roughly 60 kWh each overnight, and must be at 95% state of charge by 05:00. Overnight cold-store load runs 120–180 kVA, so the fleet has to move about 2,400 kWh through 220–280 kVA of headroom across the night — enough in total, but only if the power goes to the right van at the right time, which is why the outcome is not obvious.
Baseline, measured first: Over 28 nights on the vendor platform's first-come-first-served limiter at a fixed 240 kW ceiling, at least one van was below target at 05:00 on nine nights.
Target & controls: Zero vans below 95% at 05:00 across 20 consecutive nights, with no 15-minute interval above 400 kVA. Held constant: fleet composition, route allocation, charger model and firmware revision, the import limit, one-minute metering. Varied: the allocation rule, and whether the controller could see non-vehicle site load.
Trial 1 — Proportional power sharing across all plugged-in vans: At least one van short on 5 of 14 nights, shortfalls concentrated on late arrivals. Proportional sharing split headroom evenly across every plugged-in van, so late arrivals received ~8 kW while earlier near-full vans kept drawing an equal share. Total energy was not binding; allocation timing was.
Trial 2 — Deadline-ordered priority (open loop, fixed 150 kVA cold-store assumption): Shortfalls fell to 2 of 14 nights with heavy late arrivals. When cold store ran light (280 kVA available), fleet cap was constrained at 250 kVA; when compressors cycled together, two 15-minute intervals exceeded the limit. Ruled out open-loop control on vehicle load alone.
Trial 3 — Closed loop on measured demand + deadline ordering + per-van energy-to-target estimate: Ranking vans by remaining energy needed moved power off near-full early arrivals onto late ones (up to 22 kW rating), while closed-loop control released or withdrew fleet headroom as cold store cycled. Across 20 nights: zero vans below target, peak 15-minute demand 386 kVA.
Where the boundary falls: The candidate core activity opens with the protocol and baseline and closes when the pre-defined measure is resolved. Running the retained strategy in production and rolling it out to a second depot sit outside it. Procurement, installation, commissioning, connection application and conformance testing are separate activities (compliance testing being an excluded category). Trial-period sub-metering and temporary controller integration require supporting-activity analysis with the registered tax agent.
Where an RSP Fits
AusIndustry describes Research Service Providers as scientific or technical service providers you can engage to conduct R&D activities on your behalf, registered in specific fields (business.gov.au). On a charging or V2G programme an RSP is most useful before equipment is ordered, while the hypothesis and the measure can still shape the trial design and the activity boundary can be set as hours are worked.
For smaller entrants, R&D expenditure for the income year must generally be at least $20,000, and RSP-conducted eligible R&D activities can be claimed even where the usual $20,000 R&D expenditure threshold (ATO) — the substituted base in s 355-100(2) is generally limited to qualifying expenditure incurred to a non-associate RSP for services in a field for which it is registered, plus eligible CRC Program contributions; see claiming R&D under $20,000. Using an RSP does not guarantee eligibility — you still self-assess, and an RSP supplies research capability, not tax advice.
Which offset applies is covered in refundable vs non-refundable offset, and the announced R&DTI reform measure "is not yet law" (ATO) — the Department of Industry, Science and Resources states the proposed changes "will apply to income years starting on or after 1 July 2028" (industry.gov.au).
Frequently Asked Questions
Q: Is installing EV chargers eligible for the R&D Tax Incentive?
A: Generally unlikely as a core R&D activity, subject to the activity's own facts and the statutory tests. Selecting, procuring, installing and commissioning chargers to published standards has a determinable outcome, and work conducted to comply with a statutory requirement or standard may also fall within the exclusion in s 355-25(2) of the ITAA 1997. Candidate core activities tend to be limited to work where achievable performance had no reliable predictive basis. You self-assess.
Q: Is smart charging or load management software an eligible R&D activity?
A: It may be, subject to self-assessment against all the statutory requirements and exclusions, where the question was whether a control strategy could hold a site inside a constrained connection limit under uncertain arrivals and generation with no reliable predictive basis for the answer, and it was resolved by a systematic progression of work with a stated hypothesis and pre-defined measures, for the purpose of generating new knowledge. Configuring a commercial platform's documented load-limiting features is generally unlikely to qualify.
Q: Is vehicle-to-grid development eligible R&D in Australia?
A: Parts of it may be. Where a bidirectional duty cycle's effect on usable capacity or system behaviour is not covered by published results and can only be determined by measurement, a bounded trial with a hypothesis and a defined end may be a core R&D activity. Operating a V2G asset commercially is not itself the experiment, and identifying a core activity does not by itself make the vehicles or chargers claimable expenditure.
Q: Does obtaining a grid connection count as R&D?
A: Generally unlikely to be a core R&D activity on those facts, subject to the activity's own facts and the statutory tests. Obtaining a connection offer and satisfying a network's technical requirements is a regulated process with a defined compliant outcome, and activities associated with complying with statutory requirements or standards are excluded from being core R&D activities by s 355-25(2) of the ITAA 1997. Whether any part of it could instead be a supporting activity — which, because the work is of an excluded kind and directly related to producing a service, requires the dominant-purpose test in s 355-30 to be met — and how any associated expenditure is treated, should be assessed with the company's registered tax agent.
Sources & Further Reading
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 — Clawback of recoupments, government grants and reimbursements
ATO — Tax Reform: better targeting the R&D Tax Incentive — the announced measures and their status
industry.gov.au — Research and Development Tax Incentive — the proposed 1 July 2028 application date
legislation.gov.au — Income Tax Assessment Act 1997 — Div 355, incl. ss 355-25 and 355-30
Related: R&D for renewable energy · what does not qualify · what an RSP is · refundable vs non-refundable offset · R&D Tax Incentive in Adelaide · claiming R&D under $20,000
Talk to Ignition Research before you order the chargers or commit to a grant-funded charging or V2G budget. As a Registered Research Service Provider based in Adelaide, we help fleet, property and energy-technology companies separate the installation from the experiment, state the unknown in advance, and design a trial that produces evidence as it runs. 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.
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