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
Commercial, legal and administrative aspects of patenting, licensing or other activities
Excluded activities
Activities excluded from being systematic, investigative and experimental (SIE) activities are commercial, legal or administrative work and other activities which have a commercial or legal focus.
If you obtain a patent as an input to, or basis for, the eligible R&D activities, this expenditure would be excluded by the provisions relating to core technology and intangible assets. Find out more about acquisition of core technology and acquisition of intangible assets.
Can these activities be support activities?
Patenting, licensing, raising funds and other similar administrative tasks, are ineligible for the tax credit.
These activities are not SIE activities nor are they generally integral to (directly a part of) the SIE activities. As a result, they are not SIE activities or support activities.
Important
While the obtaining of a patent is ineligible expenditure, the patent itself may be considered to be strong evidence supporting the novelty test, as outlined in R&D activities involving an appreciable element of novelty.
Patenting and licensing
Patenting or licensing of the results of R&D is often undertaken after the technological uncertainty has been resolved or the novelty successfully developed. These activities take place after the conclusion of the eligible R&D.
Even if the patenting or licensing took place before all the uncertainties were resolved, it would be ineligible because it supports the project's commercial objectives rather than the resolution of the technical objectives.
Excluded activities as support activities
It is possible that there may be legal or administrative activities that must be undertaken for the purposes of R&D, making them eligible support activities. They would have to be all of the following:
- wholly or mainly for the purpose of the SIE activities
- required for the SIE activities
- integral to the SIE activities.
New Zealand legislation
Income Tax Act 2007
- schedule 21 part C, clause 7
- LH 7(1)(b)
- LH 7(2)(b)
Date published: 30 Sep 2008
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