New OECD guidelines for software Research and Development
In June 2025 the OECD published a new technical paper updating the methodological framework for recognising which software development activities can qualify as R&D under the criteria of the Frascati Manual.
A long-awaited, strategic document that clarifies many of the interpretative doubts accumulated over the years, especially in cases such as:
- in-house development of algorithms;
- machine learning;
- experimental software architectures;
- testing on proprietary code;
- advanced porting and refactoring;
- managing creativity and uncertainty within ICT teams.
The OECD document invites all national authorities to review their own measurement and certification practices for software R&D, in order to avoid improper exclusions and ensure accuracy in reporting. The guidance applies both to statistical measurement and to tax credit and technical certification mechanisms. An opportunity for all companies — especially tech companies, software houses, startups and R&D centres — to read their own activities in R&D terms more clearly and with up-to-date criteria.
Key contents
- Chapter 1 → Historical challenges in qualifying software R&D, differences between incremental innovation and original experimentation.
- Chapter 2 → New proposed OECD criteria to distinguish software engineering, software development and software research.
- Table on p. 11 → Updated overview of eligible and non-eligible activities for software R&D, with examples.
- Par. 3.2 and 3.4 → Analysis of the criteria of “novelty, creativity, uncertainty, systematicity and transferability” applied to software.
- Appendix A → Case studies and borderline interpretations (e.g. UI updates, porting, debugging, reverse engineering).
- Appendix B → Proposed addition to the Frascati glossary for the terms: Experimental software development, Algorithmic originality, Code-level innovation.
The paper is already a useful reference for audits and certification, as well as for tax defence purposes. Contact us now for more information or to receive a simplified technical factsheet.
Source: OECD – 2025 Technical Paper