The research and development (R&D) loss tax credit is a refund of R&D business losses. The credit can only be for:
- eligible R&D business expenditure
- up to 28% of your tax losses from R&D activity
- companies who are a tax resident in New Zealand
- dates on or after 1 April 2015.
Generally, you carry tax losses forward to the next income year. When you get the R&D tax credit you do not carry R&D business losses forward to use against income in future years. We call this 'cashing out your R&D losses'.
The R&D loss tax credit is different from the research and development tax incentive.
The R&D loss tax credit must be repaid when your business either:
- begins to make a profit
- owes repayment tax following a loss recovery event.
You must repay cashed out R&D losses before you can claim imputation credits for income tax paid.
Imputation for companies
Further information about R&D tax credits is available in our Tax Information Bulletin, Volume 28, Number 3, on pages 19-29.