From April 1st, companies undertaking approved R&D expenditure may be eligible for R&D tax credits

R&D tax credits will be operating under a pilot scheme for the 2020 financial year

The existing R&D loss tax credit is still in operation

The R&D tax credit scheme replaces Callaghan Innovation’s Growth Grant scheme and will be managed through the Inland Revenue Department

If you would like to discuss the R&D tax credits with a professional, contact the resources guys using this link or the contact details below.

The Taxation (Research and Development Tax Credits) Bill has been passed by Parliament and will become law when it receives Royal Assent. Inland Revenue will soon replace draft guidelines with guidance which reflects the changes made in the Parliamentary process and the feedback which was received in time to be incorporated.

The main features of the R&D tax incentive include:

  • a credit rate of 15%
  • a $120 million cap on eligible expenditure
  • a minimum R&D expenditure threshold of $50,000 per year
  • a limited form of refunds for the first year of the scheme that will mirror the R&D tax-loss cash-out scheme run by Inland Revenue. A more comprehensive policy will be in place for the second year of the scheme
  • a definition of R&D that ensures the credit can be accessed more easily across all sectors, including the technology sector