Can Regulatory Compliance Projects Qualify for SR&ED?

Sometimes they can, but the key is that the work must meet the CRA’s three-part test for eligibility: technological uncertainty, systematic investigation, and technological advancement. The fact that a feature is being developed for compliance purposes is not enough on its own. What matters is the technical nature of the work required to meet the requirement.

When compliance work could qualify

If meeting the regulation forces your team to solve a problem where there is no standard, documented solution, then the technical work may qualify. This often happens when a regulation sets a measurable performance, robustness, or transparency target that cannot be met using existing, proven methods. The R&D effort must involve structured experimentation, multiple technical approaches, and measurable outcomes that result in new knowledge.

When compliance work would not qualify

If compliance is achieved by following published instructions, integrating an existing library, or adding basic configuration changes, there is no technological uncertainty. In these cases, the work is implementation or integration, not research and development.

Example: High-risk AI system under the EU AI Act

Qualifying scenario

A startup is developing a computer vision inspection system for manufacturing that is classified as “high-risk” under the EU AI Act. The regulation requires that the false negative rate must remain below 1 percent across all lighting conditions and multiple surface finishes. There is no existing method for their exact sensor configuration and environmental variability.

The team designs new data augmentation pipelines to simulate extreme lighting, experiments with adaptive exposure control algorithms, tests multiple domain adaptation techniques, and builds a custom multi-model fusion approach. Each iteration is documented with hypotheses, controlled test setups, and measured results. The final method meets the performance threshold in all test conditions, producing a technical advancement that can be applied to similar systems in other industries.

Non-qualifying scenario

Another team builds a similar inspection system but meets the same regulatory requirement by following a publicly available implementation guide, adjusting a few pre-trained model parameters, and applying standard image preprocessing techniques. No experimentation is needed and all solutions are documented in existing references. This is implementation work, not eligible R&D.

The takeaway

Regulations can trigger eligible SR&ED work when they require you to solve a technical problem that does not yet have a known solution. They do not automatically make your project eligible. The difference lies in whether you are breaking new technical ground or simply applying known methods.

If you want to know whether your compliance-driven feature might qualify, SREDSimplify’s free pre-screener will walk you through the eligibility questions and provide a quick assessment.

You can try it here: https://sredsimplify.com/

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