Innovation drives long‑term business growth, and the New Zealand Government supports this through the Research and Development Tax Incentive (RDTI). The RDTI reduces the financial risk of innovation by providing a 15% tax credit on eligible R&D expenditure, capped at $120 million per year.
What is the RDTI?
The RDTI applies to qualifying research and development activities that aim to resolve scientific or technological uncertainty and create new or improved products, processes, or services. The credit can be used to offset income tax, in some limited cases refunded, or carried forward.
Who can claim?
To be eligible, a business must:
- Operate in New Zealand with a fixed establishment
- Undertake qualifying R&D activities
- Own the results of the R&D
- Spend at least $50,000 per year on R&D (unless using an approved research provider)
What costs are eligible?
Eligible expenditure includes:
- Staff wages directly related to R&D
- Relevant overheads
- Depreciation on assets used in R&D projects
How the RDTI works:
Businesses must apply for approval of their R&D activities through myIR. This is very time sensitive. Applications for general approval is the last day of the 3rd month after your balance dated for the relevant tax year.
How YHPJ can help:
R&D claims can be complex. We work with clients to assess eligibility, identify qualifying expenditure, manage applications, and integrate RDTI claims into broader tax and business planning.
If you are a start up business investing heavily in Research and Development and making losses you also maybe eligible for the Research and Development Loss Tax Credit which is different from the RDTI.
If your business is investing in innovation, we recommend reviewing your RDTI eligibility to ensure you’re not missing out!
