According to Division 355 of the Income Tax Assessment Act 1997 (ITAA 1997), the objective of the R & D Tax Incentive is to:

1. Encourage industry to conduct research and development activities that might not have been conducted due to uncertain returns from these activities, in cases where the knowledge gained is likely to benefit the wider Australian economy.

2. This is to be achieved by providing a tax incentive to companies that conduct in a scientific way, experimental activities for the purpose of generating new knowledge or information.