Changes will be made in the approval process for the 2020/21 (year 2) income year.
For both 2019/2020 and 2020/2021 tax years, you must enrol in order to receive the tax credit. You can enrol in myIR under the business tab. From there you have access to the supplementary return from the 2019/2020 income year and the application for general approval for the 2020/2021 income year.
2019/2020 income year
For the 2019/2020 tax year, to be eligible for the Research and Development tax incentive (RDTI), you must enrol through myIR and file:
- your R&D supplementary return no later than 30 days after the due date for the relevant income tax return
- your income tax return by the due date, or no later than 1 year following the due date.
R&D supplementary return
In the 2019/2020 income year, you must provide a supplementary return. You will be asked to provide the following information about the R&D.
You will be asked to describe your:
- purpose for doing R&D
- scientific or technological uncertainties
- core and supporting activities
- eligible expenditure.
General approval for the 2020/2021 income year
From the 2020/2021 income year, unless you are eligible and apply to be recognised as a significant performer, you must get general approval on your R&D activities before claiming tax credit.
General approval is intended to provide certainty to customers that their activities are eligible for the tax incentive. Approval is granted before you file your R&D supplementary return and submit your income tax return.
You must describe the core and supporting R&D activities that you are seeking approval for. If you expect that your activities will take longer than a year to complete you may apply for general approval for a maximum of three years.
General approval applications are due by the 7th day of the second month following the end of your income year. For taxpayers with a standard balance date (31 March), the due date is the following 7th of May.
In the 2020/21 income year, if you have or expect to have more than $2 million of eligible R&D expenditure in the 2020/2021 income year, you must either:
- obtain general approval
- enrol in the significant performer regime.
To elect into the significant performer regime, you must notify Inland Revenue by the 7th day of the 2nd month after the end of your income year. You must provide an estimate of your eligible expenditure on R&D which should exceed the $2 million minimum threshold.
Significant performer certificates and criteria and methodology approval
If you become a significant performer, you are not required to seek approval for your core and supporting activities. However, you must provide an R&D certificate from an approved R&D certifier.
The certificate must be supplied when you file your R&D supplementary return.
As a significant performer you may also seek criteria and methodology approval. Criteria and methodology approval examines the processes that you used to meet R&D standards.