Research and development 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 listened to you and produced a user-friendly, fit-for-purpose scheme that will support a wide range of businesses to undertake more R&D.
Main features of the incentive
The main 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.
When the tax credit will apply
The 15% tax credit will be available from the beginning of a business's 2019/20 income year.
The Taxation (Research and Development Tax Credits) Bill
The Bill to introduce the R&D tax incentive has been introduced to Parliament. Read the following related documents:
Policy changes from the discussion document
Briefing documents for download
View the submissions for the R&D Tax Incentive consultation.