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Research and development (R&D) tax credit
Te tukunga take mo te rangahau me te whanaketanga

The R&D tax credit has been repealed, effective from the 2009-10 income year. It is still available for qualifying expenditure on R&D activities carried out in the 2008-09 income year. Find out more about the R&D tax credit repeal >

Tax agents: To file a detailed statement on behalf of a client, you must upgrade your online services user ID to access your client's detailed statement. For help, ask the online services support person or administrator in your office, or contact the R&D tax credit team.

Overview of the eligibility criteria

You must meet all three of the eligibility criteria to be eligible for the research and development (R&D) tax credit. They are:

You can also assess your eligibility under these criteria.
The table below explains each of the criteria.

Criteria To meet this criteria you must... Find out more
 Eligible business or person
  • carry on business in New Zealand
  • operate with the intention of making a profit
  • carry out R&D activities in New Zealand
  • incur more than $20,000 of eligible R&D expenditure or depreciation loss in your income year, unless you have contracted for the R&D services from a listed research provider (LRP) or have only been in business for part of the year
  • meet the "on behalf of" tests, ie, have control over the R&D activities, bear the financial risk of the R&D and effectively own the results (if any)
  • conduct eligible R&D activities related to your New Zealand business, or a business you intend to set up.
Businesses do not need to be incorporated to be eligible to claim
All types of businesses in New Zealand may be eligible to claim the credit, including sole traders, partnerships and tax-exempt entities. CRIs, DHBs, tertiary institutions and entities controlled by or associated with them are excluded from eligibility. 

Exception to "in business" rule
Industry research co-operatives (IRCs) are also eligible for the tax credit, and do not have to be "in business".		 Carrying on a business

Businesses with tax-exempt income

Industry research co-operatives (IRCs) and their expenditure

Applying for a determination

'On behalf of' criteria for eligible activities

Using listed research providers
 Eligible activities carry out activities that: Support activities
Support activities may be eligible, if they are wholly or mainly for the purpose of, required for, and integral to, the SIE activities.		 What is research that is SIE?

What is a competent professional?

R&D activities involving an appreciable amount of novelty

R&D activities aimed at resolving scientific or technological uncertainty

Support activities
 Eligible expenditure
  • have incurred eligible expenditure or depreciation loss of at least $20,000 for the year, unless the R&D is contracted out to a listed research provider. If your business (not the research) was only eligible for part of the year, the $20,000 minimum is pro-rated
  • have incurred expenditure that is included in the list of eligible expenditure and depreciation loss
  • not include expenditure that is excluded expenditure
  • have eligible expenditure that was deductible in the year for which the claim is made (subject to the exceptions outlined)
 Find out what expenditure is eligible and what is excluded

Minimum expenditure threshold

Using listed research providers

View the list of research providers

Deductibility of expenditure

 


Date published: 06 Nov 2009

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