What’s Changing in R&D Tax Incentive Compliance (August 2025 Update)

The Australian Government’s R&D Tax Incentive (RDTI) program has long been a cornerstone of support for innovation, helping businesses recover part of the costs of eligible R&D activities. But as with all government initiatives, the rules and processes evolve – and 2025 has brought some of the most significant compliance updates in recent years.

This August, the Department of Industry, Science and Resources (DISR) is rolling out a new registration application form designed to make the process more efficient, transparent, and consistent. For businesses planning their next claim, here’s what you need to know.

A streamlined Applicatoin Experience

The existing R&D registration form has often been criticised for its complexity and duplication of information. The new August 2025 form introduces:

• Prefilled information fields drawn from past claims and company data, reducing manual input.
• Clearer guidance at each stage, with plain-English explanations of eligibility criteria.
• Digital-first design, making it easier to save progress, collaborate with advisors, and track submissions online.

These changes aim to reduce both administrative burden and errors, particularly for small and medium businesses that may not have dedicated compliance teams.

Faster Eligibility Decisions

One of the biggest frustrations for claimants has been delays in receiving feedback. Under the new system, DISR will provide quicker eligibility decisions, allowing businesses to confirm their claim position before committing to their tax filings.

This should give CFOs and founders greater confidence when forecasting cash flow, particularly for startups relying on R&D refunds to fund growth.

A Stronger Compliance Focus

While the form is being simplified, don’t mistake this for a loosening of standards. Regulators are increasingly focused on ensuring the program is used for genuine, innovative R&D activities, not routine business improvements.

Key compliance areas being closely monitored include:

• Associate payments (related party transactions must be substantiated with actual payments before year-end).
• Software development projects, which remain under intense scrutiny to separate genuine R&D from commercial implementation.
• Record keeping, with greater emphasis on contemporaneous documentation to demonstrate the scientific or technical nature of activities.

What This Means for Businesses

For innovative companies, these changes are largely positive: less red tape, faster responses, and a modernised application process. However, the bar for compliance has not been lowered. Businesses will need to continue investing in strong project records, technical justifications, and careful claim preparation.

Working with a trusted advisor can help ensure that claims not only pass eligibility tests but also stand up to potential ATO and AusIndustry reviews.

Final Thoughts

The August 2025 updates signal a shift towards a more digitally efficient and transparent RDTI program, aligning with the government’s broader commitment to innovation and productivity.

For businesses, the message is clear: make use of the streamlined process, but don’t compromise on compliance. With the right preparation, the R&D Tax Incentive remains one of the most valuable tools to fuel your company’s innovation journey.