Skip to main content
Inland Revenue Inland Revenue
  • About us
    • About us
    • IR careers
  • News
    • Media releases
    • Updates
    • Subscribe
    • Seminars
  • Related Websites
    • Tax Technical
    • Tax Policy
    • International
  • Contact us
    • Contact us
    • Media queries
    • Tax Technical queries
    • Tax Policy queries
  • English
Register myIR login
myIR login
Individuals and families Ngā tāngata me ngā whānau
  • IRD numbers Ngā tau IRD
  • Income tax for individuals Te tāke moni whiwhi mō ngā tāngata takitahi
  • File my individual tax return Te tuku i tētahi puka tāke takitahi
  • Support for families Ngā tautoko i ngā whānau
  • KiwiSaver Poua he Oranga
  • Student loans Student loans
  • Self-employed Mahi ā-kiri
  • More... Tāpiri atu…
Business and organisations Ngā pakihi me ngā whakahaere
  • Income tax Tāke moni whiwhi mō ngā pakihi
  • Employing staff Te tuku mahi ki ngā kaimahi
  • KiwiSaver for employers Te KiwiSaver mō ngā kaituku mahi
  • Goods and services tax (GST) Tāke mō ngā rawa me ngā ratonga
  • Non-profits and charities Ngā umanga kore-huamoni me ngā umanga aroha
  • International Tāwāhi
  • More... Tāpiri atu…
Intermediaries and others Ngā takawaenga me ētahi atu
  • Tax agents Ngā māngai tāke
  • Bookkeepers Te kaikaute
  • PAYE intermediaries Ngā takawaenga PAYE
  • Payroll bureaus Ngā tari utu ā-rārangi
  • Digital service providers Ngā kaiwhakarato pūmanawa rorohiko
  • More... Tāpiri atu…
About us
  • About us
  • IR careers
News
  • Media releases
  • Updates
  • Subscribe
  • Seminars
Related Websites
  • Tax Technical
  • Tax Policy
  • International
Contact us
  • Contact us
  • Media queries
  • Tax Technical queries
  • Tax Policy queries
English
Register
myIR login
Inland Revenue
Home
Individuals and families Ngā tāngata me ngā whānau
Popular pages Ngā wharangi rongonui
Cost of Living Payment Utu mō te utu oranga IRD numbers Ngā tau IRD File my individual tax return Te tuku i tētahi puka tāke takitahi Support for families Ngā tautoko i ngā whānau Managing my tax Te whakahaere i taku tāke
More individuals and families
Familes Ngā whānau
Working for Families Working for families Child support Te tautoko tamariki Paid parental leave Te utu tiaki pēpi
Property and Trusts Ngā wharangi rongonui
Trusts and estates Ngā rōpū kaitiaki me ngā rawa tuku iho Property Ngā rawa
Individuals Ngā tāngata
Income tax for individuals Te tāke moni whiwhi mō ngā tāngata takitahi Non-residents Ngā kainoho-tāwāhi Self-employed Mahi ā-kiri Kiwisaver for individuals Kiwisaver mā te tangata takitahi Student loans Ngā pūtea taurewa ākonga Cryptoassets for individuals Ngā rawa whiti-rangi mā te tangata takitahi Unclaimed money
Situations Ngā āhuatanga
I am going overseas Kei te haere ahau ki tāwāhi I received an income tax assessment I whiwhi i ahau tētahi aromatawai tāke moni whiwhi I'm struggling to file and pay my tax
More situations
Business and organisations Ngā pakihi me ngā whakahaere
Popular pages Ngā wharangi rongonui
Covid-19 Businesses and organisations KOWHEORI-19 Ngā pakihi me ngā whakahaere File a companies income tax return - IR4 Te tuku i tētahi puka tāke moni whiwhi kamupene - IR4 Not-for-profits and charities PAYE calculator to work out salary and wage deductions Property Ngā rawa IRD numbers Ngā tau IRD
More business and organisations
Income tax Te tāke moni whiwhi
Types of business income Ngā momo moni whiwhi pakihi Tax rates for businesses Ngā pāpātanga tāke mō te pakihi Balance dates Ngā rā mutunga tau pūtea
GST Tāke hokohoko (GST)
Charging GST Te uta i te tāke hokohoko Claiming GST Te kerēme tāke hokohoko
Employing staff Te tuku mahi ki ngā kaimahi
Register as an employer Te rēhita hei kaituku mahi Paying staff Utu kaimahi Payday filing Te tāpaetanga rā utu Deductions from income Ngā tangohanga mai i ngā moni whiwhi Kiwisaver for employers Te KiwiSaver mō ngā kaituku mahi
International Tāwāhi
International tax for business Te tāke aowhānui mō ngā pakihi
Situations Ngā āhuatanga
I am starting a new business Kei te tīmata au i tētahi pakihi hou I am going to employ someone Kei te tuku mahi ahau ki tētahi tangata My business is making a loss Kei te hapa taku pakihi
More situations
Intermediaries and others Ngā takawaenga me ētahi atu
Intermediaries Ngā takawaenga
Becoming an intermediary Te tū hei takawaenga Getting authority to act Te whiwhi whakamanatanga Executive office holders Ngā kaipupuri tūnga whakahaere Linking client accounts Te honohono pūkete kiritaki Nominated person Te tangata kua whakaingoatia Tax pooling Te whakarōpū tāke Gateway services
More intermediaries and others
Tax agents Ngā māngai tāke
Agents answers Ngā Whakautu Māngai Tax agent status Te tūnga māngai tāke Extension of time arrangements Te whakaroa i ngā whakaritenga wā Managing consolidated groups Te whakahaere rōpū tōpū Income tax for individual clients of tax agents Te tāke moni whiwhi mā ngā kiritaki takitahi a ngā takawaenga News updates for tax agents
More tax agents
Digital service providers Ngā kaiwhakarato ratonga matihiko
Getting started guide About the developer portal Mō te tomokanga kaiwhakawhanake Gateway services architecture Te hanganga ratonga tomokanga Services catalogue Te putumōhio ratonga
More digital service providers
Roles Ngā tūranga
Tax agents Ngā māngai tāke Bookkeepers Ngā kaikaute PAYE intermediaries Ngā takawaenga PAYE Payroll bureaus Ngā tari ripanga utu kaimahi Other representatives Ētahi atu māngai
Search tips

Guidance for Research and Development Certifiers

Research and development tax incentive
Research and development tax incentive
  • Contractors, certifiers, approved research providers, and RDTI credit recipients
    • Research and development certifiers
      • Guidance for Research and Development Certifiers
      • Agreed upon procedures
      • Becoming an approved research and development certifier
      • Approved R&D certifiers list
      • Issue a certificate to a significant performer

From the 2020-21 year onwards a person wanting to claim the R&D tax credit must obtain prior approval of their R&D activities before filing their supplementary R&D return. Most businesses will apply for approval of their core and supporting activities for each R&D project. This is known as general approval.

However, large businesses that reasonably expect to spend more than $2m on eligible R&D per year have the option of applying for criteria and methodologies (CAM) approval instead of general approval.

You can also apply under the general approval method for projects not covered by the CAM process.

Criteria and methodologies approval for significant R&D performers

Under criteria and methodologies approval the Commissioner and Callaghan Innovation assesses the person’s systems, processes and governance for identifying eligible R&D activities and expenditure. If the Commissioner is satisfied that the person can use those systems and processes to accurately identify what is eligible and what isn’t they will be approved, and the business will be able to self-assess whether activities and expenditure are eligible or not.

The aim of CAM is to minimise the compliance costs for the person and administration for the Commissioner, while at the same time giving the person and the Commissioner a level of confidence that R&D activities and expenditure are being correctly identified and classified.

As part of criteria and methodologies approval, the person is required to both:

  • engage an approved R&D certifier to review their RDTI supplementary return and other information before it is filed
  • obtain an R&D certificate from the certifier which is provided to the Commissioner with the supplementary return.

Being an approved R&D certifier

R&D certifiers must have the necessary accounting and tax knowledge to be able to satisfy the Commissioner they are competent to review the R&D supplementary return. Therefore, the Commissioner will only approve accounting firms that have licenced auditors as partners, directors or employees of their firms. This ensures that the R&D certifiers are subject to high professional and ethical standards.

Accounting firms wanting to apply for approval must complete the application and declaration and return it to the Commissioner. The names of approved certifiers and contact details will be published on the IR website by the Commissioner.

Role of R&D certifier

R&D certifiers are required to carry out an agreed upon procedures (AUP) engagement in accordance with APS – 1 (revised) Agreed Upon Procedures Engagements to Report Factual Findings (issued by Chartered Accountants Australia and New Zealand) before completing the R&D certificate.

The agreed upon procedures engagement is a pre-determined set of procedures the R&D certifier will perform aimed at obtaining evidence that a person has followed the approved criteria and methodologies for identifying their eligible expenditure. The agreed upon procedures can be found here .

Additional guidance for R&D certifiers

The approved criteria and methodologies are a clear description of how a person identifies its eligible and ineligible R&D activities and expenditure.

R&D certifiers are only required to perform the agreed upon procedures in relation to the approved criteria and methodologies for identifying eligible and ineligible R&D expenditure.

The certifier needs to do all of the following:

  • Obtain and be familiar with both the application for approval and the approval letter.
  • Obtain a draft copy of the R&D supplementary return and supporting calculations.
  • Perform the agreed upon procedures before the supplementary return is sent to the Commissioner.

A certifier is required to both:

  • select a sample of the expenses included in the supplementary return
  • develop appropriate tests to obtain evidence that the person followed the approved criteria and methodologies.

For example:

The agreed upon procedures for identifying and calculating eligible depreciation expenditure are:

  • All assets used in performing R&D activities are recorded in the person’s accounting system under cost centre for Research & Development.
  • Accounting depreciation is ignored for the purposes of the R&D tax credit.
  • The person produces a report of the tax depreciation for the period from the tax fixed asset register for the Research & Development cost centre.
  • Eligible depreciation is calculated by multiplying the tax depreciation on assets in the cost centre for Research & Development for the period by the percentage of time spent by employees on eligible R&D as recorded in the person’s project management and time tracking system. ie tax depreciation on assets x time spent by employees

The R&D certifier should develop tests and procedures to confirm that the depreciation included in the R&D supplementary return has been calculated in accordance with the approved criteria and methodologies. This could include:

  • Comparing the total depreciation amount in the R&D supplementary return with the underlying calculations and workpapers.
  • Selecting a sample of the depreciation amounts claimed and confirming that the assets are recorded in the cost centre for Research & Development.
  • Sampling depreciation amounts and confirming that they are calculated using Inland Revenue rates and methods.
  • Sampling depreciation amounts and confirming that any apportionment between eligible activities and other activities has been calculated by multiplying the tax depreciation for the sampled asset by the percentage of time spent by employees on eligible R&D from the person’s project management and time tracking system.

Businesses that receive criteria and methodologies approval will have different business structures, accounting systems and processes for identifying eligible and ineligible expenditure. It’s likely the certifier will develop tests for each person that they perform the agreed upon procedures for.

On completion of the procedures, the findings are documented in a report that must be attached to the R&D certificate.

The certifier is not required to express an opinion on the following matters:

  • Whether the approved criteria and methodologies are appropriate.
  • Whether the sampled expenditure is eligible expenditure.
  • Whether the supplementary return is materially correct.

The R&D certificate

On completion of the certifier’s agreed upon procedures engagement you must provide the person with an R&D certificate IR1242, which they (the person) provides to the Commissioner with their supplementary return.

The R&D certificate asks the certifier to:

  • Specify the total amount of R&D expenditure in the supplementary return that the certifier performed the agreed upon procedures in relation to.
  • Confirm that the certifier performed the agreed upon procedures and the date on which it was completed.
  • Attach a copy of the certifier’s report outlining the findings.

The R&D certificate must be signed by the person in the certifier’s firm who has overall responsibility for the agreed upon procedures engagement. This will often be a partner or director of the firm.

It is not necessary for the certificate to be signed by a licenced auditor.

    Moving between Inland Revenue sites

    picto--truck

    Heads up. We're taking you to our old site, where the page you asked for still lives

    Continue to old site
    Last updated: 14 Dec 2020
    Jump back to the top of the page top
    Inland Revenue Inland Revenue

    FOLLOW US

    • Facebook
    • Twitter
    • Youtube
    • LinkedIn
    • Subscribe

    CONTACT US

    • Contact Information
      • Contact us
      • Media queries
      • Tax Policy enquiries
      • Tax Technical enquiries
    • About us
    • Careers
    • International

    SHARE THIS PAGE

    • Email this page
    • Linkedin
    • Facebook
    • Twitter

    SHARE THIS PAGE

    • About the site
    • Conditions of use
    • Privacy
    • Glossary
    • Accessibility
    • Copyright
    • MyIR Help
    © Copyright 2023 Inland Revenue
    New Zealand Government
    Shielded website