Progress reporting

Section 11D(13) requires that progress reports be submitted to the DST on all approved R&D projects. Using the Progress Report Form.To make this task easier, applicants must keep specific records of R&D activities and expenditure that they can use to enable progress reporting and use when required for purposes of claiming the tax deduction. The following are examples of records to maintain:

  • The R&D plan, which stipulates the activity milestones and resources used on the project. The R&D plan should be a living document that is updated as major changes occur and that should be used to inform the DST of the changes introduced.
  • Records of any preliminary research, including literature and patent searches, feasibility studies, options papers and a risk management analysis.
  • Personnel timesheets and other time-recording data, clearly showing the time apportionment where production personnel were used in R&D.
  • Records of experiments, indicating the aim of the experiment, how and when it was conducted, as well as the outcome. The records should ideally state the aim of the experiment, how and when it was conducted, as well as the outcome. Where use was made of the production line for R&D, it is important to define the period of use for R&D purposes.
  • Personnel time sheets, to confirm that the expenditure portion is directly related to R&D.

Other than assisting companies to comply with requirements for claiming the deduction, the records of R&D activities and expenditure can assist government in tracking the impact of the incentive. It is a requirement of the legislation that the Minister of Science and Technology tables a report in Parliament on the performance of the incentive on a yearly basis.