R&D Tax Incentive

The Government has committed to raising New Zealand’s research and development (R&D) expenditure to 2% of GDP over 10 years.

To reach this target more businesses will need to increase their expenditure on R&D. This will be supported through an R&D tax incentive.

We have listened to your feedback and have produced a user-friendly, fit-for-purpose scheme that will support a wide range of businesses to undertake more R&D.

The key features of the R&D tax incentive include:

  • A credit rate of 15%
  • A $120 million cap on eligible expenditure
  • A minimum R&D expenditure threshold of $50,000 per year
  • A limited form of refunds for the first year of the scheme that will mirror the R&D tax-loss cash-out scheme run by Inland Revenue. A more comprehensive policy will be in place for the second year of the scheme
  • A definition of R&D that ensures the credit can be accessed more easily across all sectors, including the technology sector
  • The inclusion of State Owned Enterprises, industry research cooperatives, levy bodies, and minority-owned subsidiaries of select Crown entities.

The 15% tax credit will be available from the beginning of a business's 2019/20 income year.

Video transcript

R&D Tax Incentive summary flyer [PDF 91KB]

Policy changes from the Discussion Document

Read how the proposed policies changed following feedback [PDF 326KB]

Briefing documents for download

Cover note for release of R&D tax incentive briefings 14 June – 29 August 2018 [PDF 217KB]

Submissions

Matrix of Submissions [XLSB 16KB]