The Organisation for Economic Co-operation and Development (OECD) provides a useful and practical definition of research and development.
As a guide the following definition can be used to assess activities:
- Research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts. The aim of a research activity is to discover novel, practical and non-obvious information of a scientific or technological nature.
- Development is the application of research findings or other scientific knowledge for the creation of new or significantly improved products, processes or services. Development activities are aimed at devising, developing or creating an invention, design or computer programme of a scientific and technological nature.
It is important to note that the usage of the terms should be confined to the definitions of scientific or technological research and development contained in the Income Tax Act.