To qualify for the tax incentive, the R&D activities must meet the definition of R&D in section 11D(1) of the ITA, which starts that:

"For the purpose of section 11D, “research and development” means systematic, investigative or systematic experimental activities of which the result is uncertain for the purpose of -

(a)                           discovering non-obvious scientific or technological knowledge;

(b)                           creating or developing –

(i)      an invention as defined in section 2 of the Patents Act;

(ii)    a functional design –

(aa)        as defined in Section 1 of the Designs Act, capable of qualifying  for registration under Section 14 of that Act; and

(bb)        that is innovative in respect of the functional characteristics or intended uses of that functional design;

[Sub-para. (ii) substituted by s. 18 (1) (a) of TLA Act of 2014 with effect from 1 January, 2015 and applicable in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October 2022.]

(iii)   a computer program as defined in Section 1 of the Copyright Act which is of an innovative nature; or

(iv)  knowledge essential to the use of such invention, functional design or computer program other than creating or developing operating manuals or instruction manuals or documents of a similar nature intended to be utilised in respect of that invention, functional design or computer program subsequent to the research and development being completed; or

(c)                            making a significant and innovative improvement to any invention, functional design, computer program or knowledge contemplated in paragraph (a) or (b) for the purposes of -

(i)                  new or improved function;

(ii)                improvement of performance;

(iii)               improvement of reliability; or

(iv)              improvement of quality,

of that invention, functional design, computer program or knowledge;

[Para. (c) amended by s. 18 (1) (b) of TLA Act of 2014 deemed to have come into operation on 1 October, 2012 and applicable in respect in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October, 2022.]

(d)                           creating or developing a multisource pharmaceutical product, as defined in the World Health Organisation Technical Report Series, No. 937, 2006 Annex 7 Multisource (generic) pharmaceutical products: guidelines on registration requirements to establish interchangeability issued by the World Health Organisation, conforming to such requirements as must be prescribed by regulations made by the Minister after consultation with the Minister for Science and Technology; or

[Para. (d) inserted by s. 18 (1) (c) of TLA Act of 2014 deemed to have come into operation on 1 October, 2012 and applicable in respect in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October, 2022.]

(e)                            conducting a clinical trial as defined in Appendix F of the Guidelines for good practice in the conduct of clinical trials with human participants in South Africa issued by the Department of Health (2006), conforming to requirements as must be prescribed by regulations made by the Minister after consultation withthe Minister for Science and Technology.

[Para. (e) inserted by s. 18 (1) (c) of TLA Act of 2014 deemed to have come into operation on 1 October, 2012 and applicable in respect in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October, 2022.]