R&D Grants and innovation news: R&D tax incentive passes third reading

Hon Dr Megan Woods
Minister of Research, Science and Innovation

2 May 2019

The Taxation (Research and Development Tax Credits) Bill passed its third reading tonight meaning that up to ten times as many businesses will receive support to perform research and development work, says Research Minister Megan Woods.

After extensive consultation with business leaders, the key features of the incentive were announced. These included a 15 per cent credit rate, a $120 million cap on eligible expenditure, and a minimum expenditure threshold of $50,000 per year.

“The incentive will support businesses of all sizes to undertake R&D. This will help New Zealand to move towards having a more sustainable, productive and inclusive economy.

“Officials estimate that 2,000 to 3,000 businesses will be able to benefit from the new R&D tax incentive, compared to the current 300 businesses receiving Growth Grants.

“The R&D Tax Incentive is one part of a wider package of government support for New Zealand’s innovation system and this new legislation represents a big step towards the Government’s goal of raising New Zealand’s total R&D spending to of 2% of GDP by 2027.

Further work is already underway to support all stages of business, including start-ups, to ensure they can access the R&D Tax Incentive going forward. For example, for year one of the incentive, there is limited refundability available for smaller businesses within tax loss. The Government has committed to having a decision in place for year two of the scheme.

Minister Woods encourages businesses that are doing R&D to find out whether they are eligible, and ensure they are recording expenditure and ready to file at the end of the tax year.

Contact the resources guys if you’d like to understand if your company qualifies