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Budget 2024 | The Government has confirmed changes to personal income tax, the independent earner tax credit, in-work tax credit, and the minimum family tax credit. Find out more: Personal income tax threshold changes

You must support your claim for tax credits with the relevant information. Records must show that your:

  • business is an eligible entity
  • R&D activity is eligible
  • R&D expenditure is eligible.

Eligible business

In most cases your normal business records should prove that you are a business in New Zealand or a non-business researcher.

If you are in one of the following situations, you must make sure you have records which demonstrate you meet the relevant criteria:

  • contracting with someone else to perform R&D
  • a non-business researcher
  • an overseas owned company conducting the R&D through a fixed establishment in New Zealand
  • performing R&D on behalf of a company in the same group which owns the R&D
  • conducting the R&D in a partnership or joint venture, a government owned organisation or university within a group of companies.

Eligible R&D entities 

Eligible R&D activities

To show that your activities meet the definition of eligible R&D activities, you must record:

  • the new knowledge, new or improved processes, services or goods you aim to produce
  • the scientific or technological uncertainty your activities seek to resolve
  • how this uncertainty cannot be solved by current, publicly available information
  • the systematic approach used to resolve this uncertainty
  • how your supporting activities exist solely to support your core activities.

Eligible R&D activities 

Eligible expenditure

Claims for the tax credit will be based on information about the staff time and other resources that were spent on eligible R&D activities. Your records must show the:

  • connection between your expenditure and eligible R&D activities
  • claimed expenditure is on the list of eligible expenditure types
  • claimed expenditure is not on the list of ineligible expenditure types.

Eligible R&D expenditure  

When you use contractors

If you use a contractor or an approved research provider to undertake R&D on your behalf, you still must submit your supplementary return in year one or request for general approval in year two. You are also responsible for your income tax return.

Your contractor must provide the following information:

  • records that document the investigation
  • the scientific and technological uncertainty
  • records for your supplementary return in year one or general approval in year two.

If your contract includes work that does not meet the definition of an R&D activity, you will need to separate the payments made for work related to core and supporting activities and other work.

R&D contractors

Approved research providers

Approved research providers must provide the following information:

  • records relating to R&D activities and expenditure
  • that you continue to meet the requirements for being a listed approved research provider
  • general business records that indicate the nature of the services you provide.

R&D approved research providers

Last updated: 28 Apr 2021
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