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
Research in social sciences, arts or humanities
Excluded activities
Research in social sciences, arts or humanities is excluded as SIE activity.
The legislation does not define the scope of the exclusion but without providing an exhaustive list, the commonly accepted meaning of the terms social sciences, arts or humanities includes:
- economics
- classics
- languages
- literature
- music
- philosophy
- sociology
- anthropology
- psychology
- history
- religion
- visual and performing arts.
Example - psychological research
A business selling educational products researches their target market's response to their products. The research involves studying how their clients learn and interact with the company's resources. As psychological research, this activity is ineligible for the tax credit.
Note: Examples are simplified. You should check the detailed R&D information and/or consult your professional advisor.
Can these activities be support activities?
Research in these fields is only excluded as an SIE activity. If you are developing a new product or process and eligible SIE activity requires research in an excluded field, that research may be eligible as a support activity.
To be eligible as a support activity, 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 - social science research and support activity
A company is developing a new flight simulator which aims to overcome a number of previously unresolved technological uncertainties. Testing the new simulator requires research into human behaviour. Provided the research meets the tests for an eligible support activity, it will qualify.
Note: Examples are simplified. You should check the detailed R&D information and/or consult your professional advisor.
R&D in excluded fields
If you are developing a product to be used in an excluded field (eg the visual arts), the activity is not necessarily excluded from eligibility for the tax credit because of this.
Example - product for use in visual arts
Business A develops and manufactures technically innovative ceramic glazes that meet the tests for the R&D tax credit.
The glazes' use in the visual arts will not exclude the development from being eligible.
Note: Examples are simplified. You should check the detailed R&D information and/or consult your professional advisor.
Example - novel software for use in the film industry
A sole trader is developing novel animation software for sale is not excluded from eligibility for the tax credit because the software is used in the film industry.
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 2
- LH 7(1)(b)
- LH 7(2)(b)
Date published: 30 Sep 2008
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