Farmers, growers, graziers and agribusinesses running systematic trials to solve production problems can claim a refundable tax offset on that work through the R&D Tax Incentive, provided the operation runs through a company.
Australian agriculture has always run on experiment, from dry country cropping to precision livestock management. Prime Innovation, a specialist division of Prime Partners, works from an office in Orange with farmers, graziers, viticulturists and agribusinesses across one of the most varied farming regions in the country, identifying the trials that qualify and the costs that belong in each claim.
For a company with aggregated turnover under $20 million, which covers the great majority of Australian farming operations, every $100,000 of qualifying spend returns $43,500. Because it is refundable, anything above the company's tax bill is paid out by the ATO in cash, which matters in a year where there was no profit to carry it against.
A trial still counts when the result is disappointing, because the claim rests on the question you set out to answer and the way you went about it. For a company with a 30 June year end, R&D done in the 2025-26 income year has to be registered with AusIndustry by 30 April 2027.
A lot of what a producer does to improve an operation can qualify, where there is real technical uncertainty and the work is done systematically rather than by feel.
Testing new varieties, rootstocks or cultivars under local conditions where yield, disease resistance or quality is genuinely unknown.
Developing or adapting precision technology where its effectiveness on your soil types, topography or cropping system is unproven.
Experimental breeding aimed at particular traits, where the genetic outcome cannot be predicted.
New approaches to soil health, carbon sequestration, salinity or erosion under local conditions.
Cutting water, chemical inputs or emissions where whether production targets can still be met is an open question.
Designing and testing sensor systems, automation or analytics for agricultural use in field conditions.
Biological alternatives to chemicals, where effectiveness, application method or environmental interaction is unresolved.
New storage, processing or preservation methods to extend shelf life or cut waste, tested rather than assumed.
Irrigation, recycling or desalination systems where the technical performance is uncertain.
A farmer who plants a new variety following the seed supplier's recommended practice is not doing R&D. A farmer who trials that variety under different irrigation regimes, soil amendments and planting densities, to find out whether it performs in local conditions where no data exists, and records the method and the results, may well be.
Planting, irrigating, fertilising and harvesting by established methods.
Following a manufacturer's or agronomist's fertiliser program based on known soil science.
Routine husbandry: feeding, vaccination, breeding with proven genetics.
Using GPS auto-steer or a weather station as designed.
Compliance testing, for residues or food safety, by established methods.
Market research into demand, pricing or distribution.
Routine environmental monitoring with no experiment attached.
A broadacre operation in western NSW trialling five drought tolerant varieties under three soil moisture regimes across replicated plots. The uncertainty: whether commercially viable yields hold under 250mm of annual rainfall on those soil types.
A stone fruit grower testing predatory species as an alternative to chemical pest control. Whether the population establishes, whether pest suppression is adequate, and whether it works alongside the remaining spray program.
A vineyard building a system from soil moisture sensors, weather prediction and vine stress indicators. The uncertainty: whether a 30 per cent cut in water can be made while holding grape quality.
A cattle property running a multi-year comparison of rotational grazing against set stocking, measuring soil carbon, pasture composition, weight gains and water infiltration.
Once a trial qualifies, the eligible spend reaches well beyond the agronomist's invoice. Much of it is money the operation spends anyway, and the share that went into the R&D can be claimed when it is recorded and apportioned properly.
Salary and wages for the hours you and your staff spend designing, running and measuring the trial, worked out from a time log. Only amounts the company pays as salary or wages count, so a director paid through trust distributions has no salary to include.
The decline in value of equipment in proportion to its use on the trial, along with the cost of modifying a seeder, sprayer or irrigation system so the trial can run.
Seed, fertiliser, chemicals and water applied to the trial plots, identified with a GPS boundary file so they can be separated from the rest of the paddock.
Soil and tissue testing, agronomists, consultants and contractors who carry out part of the trial work for you.
Activities done directly to support the trial, such as collecting baseline data or building trial infrastructure, can be claimed as supporting R&D activities.
A trial running over several seasons is registered each year for the work done in that year, so the costs are claimed as they are incurred.
Where produce from a trial is sold or used commercially, the feedstock rules can add an amount to assessable income, which reduces the benefit on the inputs that went into it. We work that through before the claim is prepared.
A 2,400 hectare cropping and sheep operation with four permanent staff and aggregated turnover of $4.2 million. The R&D is a variable rate seeding system adapted to variable soil types, alongside cover crop trials for soil health.
| Category | Total cost | Eligible | Why |
|---|---|---|---|
| Farm manager time | $120,000 | $48,000 | 40% on trial design and monitoring |
| Agronomist | $35,000 | $35,000 | Trial methodology and analysis |
| Seed and inputs | $28,000 | $28,000 | Trial plots only |
| Soil and tissue testing | $12,000 | $12,000 | Trial plot analysis |
| Equipment modification | $42,000 | $42,000 | Modifying the seeder for variable rate |
| Data equipment, decline in value | $18,000 | $18,000 | Soil sensors and a weather station |
| Yield monitoring and analysis | $17,000 | $17,000 | Harvest data and statistics |
| Total | $272,000 | $200,000 |
$200,000 at 43.5 per cent is a refundable offset of $87,000. For a family farming company that can fund the next season's trial program, pay down equipment finance, or simply sit in the account through a hard year.
Illustrative only. What a claim is worth depends on your facts and your apportionment.
Agricultural R&D has record keeping problems that a laboratory does not. Trials run across a whole season or several years, the weather does what it likes, and the same people and machinery handle both the trial and the paddock next to it.
Prime Partners has an office in Orange serving agricultural clients across the Central West, the Central Tablelands and beyond. The region runs broadacre cropping, viticulture, stone fruit, livestock, forestry, and newer industries like truffles and olives.
We look at a season's trials alongside the rest of your tax affairs, so work that qualifies is picked up as part of the same advice that covers your returns, your structure and your tax planning.
Because the practical realities of an operation are hard to understand from an office, and they are what the claim describes.
Turning what you did in the paddock into something that reads as a defensible R&D activity is most of the job.
Documentation designed around the way work happens on the farm, simple enough to keep up through a busy season.
The claim is prepared alongside the rest of your tax and business advice, by people who know the operation.
That is a good place to start. If there was a real question you were trying to answer, and you kept some record of what happened, there may well be a claim in it.
Contact Prime Innovation→Once a month we send our latest thinking on tax, business, and the moments that shape a year. Practical, considered, and written for people who would rather understand the why than chase the headline.
