The New Zealand Government’s flagship research and development (R&D) incentive provides a 15% tax credit for expenditure on eligible R&D activities. Tax credits can be used to offset income tax payable, with unused amounts being refunded. Refund caps apply.
Qualifying R&D includes core R&D activities and supporting R&D activities. Core R&D activity must:
- Be conducted using a systematic approach; and
- Have a purpose of creating new knowledge or new or improved goods, services or processes; and
- Have the intent to resolve scientific or technological uncertainty; and
- Occur in New Zealand.
Other activities that are integral to and have the main purpose of supporting the core R&D activity may also qualify as supporting R&D.
Robust R&D technical documentation and expenditure tracking systems allows businesses to prepare a robust and fulsome R&D claim. EY’s specialist team can assist by facilitating workshops, advising on the design and implementation of systems for tracking and recording projects and expenses, or guiding you through the stages of the application process. EY also has a proprietary digital tool, EY Ready(link) which can assist with compliance and real-time record keeping.