Updated: Find out about the latest updates to the RDTC information.
Important: To claim the credit, you must enter an amount in the R&D tax credit keypoint on your income tax return and submit a detailed statement online.
Prospecting, drilling and exploring
Excluded activities
Activities excluded from being systematic, investigative and experimental (SIE) activities are prospecting, exploring or drilling for:
- minerals
- petroleum
- natural gas, or
- geothermal energy.
Eligible R&D
It is possible to have eligible R&D activity in extractive industries. Examples that may meet the tests for eligible SIE activity include:
- development of improved conceptual generic mineralisation models or devices, provided the models or devices have general application
- development of general predictive guidelines for exploration (for example ore vector research).
Excluded activities as support activities
If eligible SIE activity is taking place, drilling may be eligible as a support activity. To be eligible, an activity would need 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.
Example - ineligible activity as support activity
A mining company develops a novel drill bit that meets the appreciable novelty test and requires field trials.
Drilling that is wholly or mainly for the purpose of, required for and integral to the experimental phase of the development of the new drill bit will qualify as an eligible supporting activity.
Note: Examples are simplified. You should check the detailed R&D information and/or consult your professional advisor.
New Zealand legislation
Income Tax Act 2007
- schedule 21 part C, clause 1 l
- LH 7(1)(b)
- LH 7(2)(b)
Date published: 30 Sep 2008
Back to top
