Important:
- To claim the R&D tax credit, you must submit a detailed statement online.
- In most instances, the last date for submitting a detailed statement was April 30 2010. Find out more
Eligible business tests
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R&D activities must relate to your business
R&D activities must be related to your New Zealand business, or a business you intend to set up.
The intended business may be located outside New Zealand, but you must have a business in New Zealand.
There are a number of organisations that are specifically excluded from eligibility for the R&D tax credit. Find out more about excluded organisations.
Carrying on business
Unless you are an industry research cooperative (IRC), to be eligible to claim the tax credit, you or a member of your group of companies must carry on business in New Zealand. Carrying on business has the same meaning as for other tax purposes and essentially means you must operate with the intention of making a profit.
Find out more about industry research co-operatives (IRCs) and their expenditure.
Other than IRCs, the entity claiming the tax credit must meet the requirement to be in business. A wholly owned subsidiary set up to undertake R&D may be eligible if it meets the business test in its own right.
Note
In some circumstances, the "in business" and "on behalf of" tests can be satisfied within a group.
Focus of R&D activity
The R&D activity must relate to your business, or an intended extension of it.
Non-resident claimants
If you are a non-resident, you must carry on business through a fixed establishment in New Zealand.
Important - expenditure/depreciation loss
The tax credit can only be claimed for eligible expenditure or depreciation loss, and your eligible expenditure or depreciation loss must relate to eligible R&D activities. You must 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 eligible for only part of the year, the $20,000 minimum is pro-rated. Find out about the minimum expenditure threshold.
Eligible business structures
All types of businesses in New Zealand may be eligible to claim the credit, including sole traders, partnerships and tax-exempt entities. Businesses do not need to be incorporated to be eligible to claim.
Businesses with tax-exempt income are eligible
Entities with only exempt income may be eligible for the R&D tax credit, but must be carrying on a business.
Find out more about businesses with tax-exempt income.
Eligible expenditure and depreciation loss
For more information about eligible expenditure and depreciation loss, including for businesses with tax-exempt income, find out what expenditure is eligible and what is excluded.
Find out more
Next steps
Date published: 02 Nov 2009
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